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16 Dec 2014
AUD/USD firms near the 0.822 handle – TDS
The TD Securities Team notes that disappointment over the lack of easing bias in the RBA minutes led AUD/USD to fall downwards near the 0.822 handle.
Key Quotes
“RBA minutes for the Dec 2 RBA Board meeting were old news as (1) the next day weak Q3 GDP was a game changer for analysts calling for rate cuts in 2015 due to the “income recession” and (2) a lengthy interview (Fri Dec 12) by the RBA Governor ruled out near-term rate cuts, claiming that “cheap” borrowing rates were not the impediment to growth, but a lack of confidence was.”
“The FX phrase remained unchanged where “the Australian dollar remained above most estimates of its fundamental value .. further exchange rate depreciation was likely to be needed”.“
“The discussion about rate cut speculation was only emphasised by those looking for rate cuts in early 2015.”
“AUD firmed to $US0.822 on “disappointment” over the lack of an explicit easing bias (we know the RBA Governor would like to see $US0.75).”
“The NZD is also a little firmer but not due to an impressive set of fiscal books.”
Key Quotes
“RBA minutes for the Dec 2 RBA Board meeting were old news as (1) the next day weak Q3 GDP was a game changer for analysts calling for rate cuts in 2015 due to the “income recession” and (2) a lengthy interview (Fri Dec 12) by the RBA Governor ruled out near-term rate cuts, claiming that “cheap” borrowing rates were not the impediment to growth, but a lack of confidence was.”
“The FX phrase remained unchanged where “the Australian dollar remained above most estimates of its fundamental value .. further exchange rate depreciation was likely to be needed”.“
“The discussion about rate cut speculation was only emphasised by those looking for rate cuts in early 2015.”
“AUD firmed to $US0.822 on “disappointment” over the lack of an explicit easing bias (we know the RBA Governor would like to see $US0.75).”
“The NZD is also a little firmer but not due to an impressive set of fiscal books.”