11 Nov 2013
Flash: AUD/JPY upside potential diminished - Westpac
FXstreet.com (Barcelona) - The bearish result of Friday's downgrade of Australian GDP projections for 2014 to 2%-3% from 2.5%-3.5% by the RBA, together with the strong US NFP, according to Rob Rennie, FX Strategist at Westpac, makes an AUD/JPY long position no longer attractive, therefore Westpac has decided to close a long position in the pair.
Key Quotes
"We have maintained a more upbeat outlook for the A$ since early August, arguing that markets had gotten too downbeat on the outlook for China growth, the commodity complex and the Australian economy."
"Back on November 11 we recommended buying AUD/JPY on the basis that the US debt ceiling and Government shutdown would harm Asian demand for the US$, making the A$ more attractive."
"The combination of Friday's significant downgrade of Australian growth forecast for 2014 from 2.5%-3.5% to 2%-3% by the RBA plus the stronger than expected US payrolls outcome has reduced the upside for this trade. We have therefore closed this position for a modest loss (-0.39%) to our Forex Focus portfolio."
Key Quotes
"We have maintained a more upbeat outlook for the A$ since early August, arguing that markets had gotten too downbeat on the outlook for China growth, the commodity complex and the Australian economy."
"Back on November 11 we recommended buying AUD/JPY on the basis that the US debt ceiling and Government shutdown would harm Asian demand for the US$, making the A$ more attractive."
"The combination of Friday's significant downgrade of Australian growth forecast for 2014 from 2.5%-3.5% to 2%-3% by the RBA plus the stronger than expected US payrolls outcome has reduced the upside for this trade. We have therefore closed this position for a modest loss (-0.39%) to our Forex Focus portfolio."