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4 Mar 2014
Flash: Big surprise if RBA resumed AUD jawboning - Westpac
FXStreet (Bali) - According to Sean Callow, FX Strategist at Westpac, since the RBA Board is firmly neutral, it will limit the tension over today’s RBA meeting.
Key Quotes
"In Feb the RBA concluded its statement by saying “the most prudent course is likely to be a period of stability in interest rates”, a phrase likely to be repeated after a month without major change in Australia’s outlook. The language on AUD should also be similar though not identical, likely to note that sustaining recent levels should help achieve “balanced growth”."
"Of course AUD has risen since/because of the RBA’s change in tone in Feb, AUD TWI to 68.5 from 67.7 prior to the Feb meeting, AUD/USD from the mid-0.87s. However it would be a big surprise if the RBA resumed its AUD jawboning after a mere one month pause, especially given the apparently substantial role AUD decline played in the Q4 inflation upside surprise. Pricing for the RBA cash rate has moved firmly away from toying with a year-end hike, now sitting at -9bp by Sep-Oct, -2bp by Feb 2015."
Key Quotes
"In Feb the RBA concluded its statement by saying “the most prudent course is likely to be a period of stability in interest rates”, a phrase likely to be repeated after a month without major change in Australia’s outlook. The language on AUD should also be similar though not identical, likely to note that sustaining recent levels should help achieve “balanced growth”."
"Of course AUD has risen since/because of the RBA’s change in tone in Feb, AUD TWI to 68.5 from 67.7 prior to the Feb meeting, AUD/USD from the mid-0.87s. However it would be a big surprise if the RBA resumed its AUD jawboning after a mere one month pause, especially given the apparently substantial role AUD decline played in the Q4 inflation upside surprise. Pricing for the RBA cash rate has moved firmly away from toying with a year-end hike, now sitting at -9bp by Sep-Oct, -2bp by Feb 2015."