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26 Aug 2013
Flash: AUD/USD looks to cap below 0.9200 ahead of Fed – Westpac
FXstreet.com (New York) - The prospect of the Fed kicking off ‘tapering’ of any size on 18 September is enough to help cap AUD/USD near-term, say ahead of the 55-day ma at 0.9180, suggests Sean Callow, a Global FX Strategist at Westpac.
Key quotes
However, “with iron ore and other key commodity prices resilient, the next RBA easing only 50% priced by Nov and China’s growth outlook more promising, we expect AUD/USD 0.8850 to hold on the week and for AUD to make further gains vs e.g. NZD and CAD.”
In terms of the AU curve, “Expect the recent range to hold this week, as outright yields consolidate. Moreover, AU swap spreads are at the bottom of recent ranges, which should see narrowing slow.”
Key quotes
However, “with iron ore and other key commodity prices resilient, the next RBA easing only 50% priced by Nov and China’s growth outlook more promising, we expect AUD/USD 0.8850 to hold on the week and for AUD to make further gains vs e.g. NZD and CAD.”
In terms of the AU curve, “Expect the recent range to hold this week, as outright yields consolidate. Moreover, AU swap spreads are at the bottom of recent ranges, which should see narrowing slow.”