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12 Mar 2013
Forex Flash: AUD/USD upside limited from yield persective - Westpac
The Australian OIS/IB markets continues to price in just one more rate cut with 28 points of easing implied by November, notes Timothy Cameron, FX strategist at Westpac.
"With the overhang of sub-trend GDP growth and Eurozone political uncertainty the ‘25 points priced in’ level seems to be a psychological barrier as most economists are calling for at least one more cut in this RBA easing cycle" Timothy says.
"This cap on short-term Australian rates should make it hard for AUD to find upside from a yield point of view" the strategist adds.
"With the overhang of sub-trend GDP growth and Eurozone political uncertainty the ‘25 points priced in’ level seems to be a psychological barrier as most economists are calling for at least one more cut in this RBA easing cycle" Timothy says.
"This cap on short-term Australian rates should make it hard for AUD to find upside from a yield point of view" the strategist adds.