22 Jan 2014
Flash: AUD/USD to 0.8 by year end? - Societe Generale
FXstreet.com (Barcelona) - Kit Juckes, Global Head of Currency Strategy at Societe Generale believes that despite a squeeze higher on inflation data, AUD/USD will likely be nearer 0.8000 by year end.
Key Quotes
"Meanwhile, overnight, a 0.8% q/q increase in Australia's CPI took inflation to 2.7% y/y from 2.2%, severely reducing the chances of any further rate cuts and as a consequence triggered a squeeze higher in AUD/USD.”
“A deteriorating terms of trade, a currency that remains overvalued and a weakening labour market won't be helped by the news that consumers are facing more inflation, but the short AUD trade is popular and this is obviously a catalyst for the market to cut back positions and take stock.”
“We still expect AUD/USD to be a lot closer to 0.80 by the end of the year."
Key Quotes
"Meanwhile, overnight, a 0.8% q/q increase in Australia's CPI took inflation to 2.7% y/y from 2.2%, severely reducing the chances of any further rate cuts and as a consequence triggered a squeeze higher in AUD/USD.”
“A deteriorating terms of trade, a currency that remains overvalued and a weakening labour market won't be helped by the news that consumers are facing more inflation, but the short AUD trade is popular and this is obviously a catalyst for the market to cut back positions and take stock.”
“We still expect AUD/USD to be a lot closer to 0.80 by the end of the year."