5 Nov 2013
Flash: RBA focus will be the language on the currency - Westpac
FXstreet.com (Barcelona) - Ahead of the RBA, Sean Callow, FX Strategist at Westpac, thinks the neutral statements from the Sep and Oct meetings should be repeated, with no changes in the slightly easing bias seen in the last minutes from Oct 15.
Key Quotes
The focus for AUD will be the language on the currency, which in Oct was seen as quite a mild statement, in turn producing a 60 pip AUD/USD rally. In Oct the RBA noted that AUD “rose recently, but is still about 10 per cent below its level in April."
"A lower level of the currency than seen at present would assist in rebalancing growth in the economy. AUD TWI has risen 1.7% since the Oct meeting and Governor Stevens’ speech last week suggests some increased concern."
"But if the RBA maintains a neutral stance on rates as expected, it is hard to see AUD/USD suffering much damage from, say, the RBA predicting that AUD will be “materially lower” at “some point in the future”, Stevens’ lines from last week."
Key Quotes
The focus for AUD will be the language on the currency, which in Oct was seen as quite a mild statement, in turn producing a 60 pip AUD/USD rally. In Oct the RBA noted that AUD “rose recently, but is still about 10 per cent below its level in April."
"A lower level of the currency than seen at present would assist in rebalancing growth in the economy. AUD TWI has risen 1.7% since the Oct meeting and Governor Stevens’ speech last week suggests some increased concern."
"But if the RBA maintains a neutral stance on rates as expected, it is hard to see AUD/USD suffering much damage from, say, the RBA predicting that AUD will be “materially lower” at “some point in the future”, Stevens’ lines from last week."