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3 Mar 2015
AUD/USD’s upside momentum to fade – BTMU
FXStreet (Barcelona) - Derek Halpenny, European Head of GMR at Bank of Tokyo-Mitsubishi UFJ, comments that with RBA’s statement signalling that the central bank maintains an easing bias, the upside impact on AUD from today’s rate decision will be limited, further forecasting AUD/USD to tumble to 0.7300 by year-end.
Key Quotes
“As we had expected, the RBA held off from cutting the key official interest rate again at its meeting today after cutting by 0.25-point on 3rd February."
“Still, while the AUD/USD rate is the biggest mover today (+0.8%), the scope for further gains will be limited by the pretty explicit signal that additional monetary easing may be required. The statement included the view of the RBA that “Further easing in policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target”.”
“The explicit mention of another rate cut does make it more probable now that the RBA cuts once more to 2.00% (next meeting 7th April). However, another cut and in fact a bit more than that is priced in the Australian rates market and hence the impact on AUD/USD will not be significant.”
“We are expecting AUD/USD to drop to 0.7300 by the end of the year but that forecast is more about the US dollar and the Fed commencing rate increases although another RBA rate cut will certainly help reinforce the move lower that we expect.”
Key Quotes
“As we had expected, the RBA held off from cutting the key official interest rate again at its meeting today after cutting by 0.25-point on 3rd February."
“Still, while the AUD/USD rate is the biggest mover today (+0.8%), the scope for further gains will be limited by the pretty explicit signal that additional monetary easing may be required. The statement included the view of the RBA that “Further easing in policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target”.”
“The explicit mention of another rate cut does make it more probable now that the RBA cuts once more to 2.00% (next meeting 7th April). However, another cut and in fact a bit more than that is priced in the Australian rates market and hence the impact on AUD/USD will not be significant.”
“We are expecting AUD/USD to drop to 0.7300 by the end of the year but that forecast is more about the US dollar and the Fed commencing rate increases although another RBA rate cut will certainly help reinforce the move lower that we expect.”