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7 Jul 2014
RBA much more reactive to AUD/USD above .95 - RBS
FXStreet (Bali) - RBS Strategists note how the RBA Governor Glenn Stevens is much more reactive to the exchange rate above .95 now.
Key Quotes
"We interpret the speech from RBA Governor Glenn Stevens lastvweek as evidence that the RBA is much more reactive to the exchange rate above .95. It may lean towards either an easing bias or threaten intervention if it were to rise above this level, especially if its key commodity prices remain weaker."
"There is clearly evidence of a global reach for yield that has pushed the AUD up recently (along with other currencies such as the KRW). However, we see the USD strengthening on a firming rates outlook in US. This may be sufficient to help cap AUD at .95 and we continue to forecast .85 over 12 months."
Key Quotes
"We interpret the speech from RBA Governor Glenn Stevens lastvweek as evidence that the RBA is much more reactive to the exchange rate above .95. It may lean towards either an easing bias or threaten intervention if it were to rise above this level, especially if its key commodity prices remain weaker."
"There is clearly evidence of a global reach for yield that has pushed the AUD up recently (along with other currencies such as the KRW). However, we see the USD strengthening on a firming rates outlook in US. This may be sufficient to help cap AUD at .95 and we continue to forecast .85 over 12 months."