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3 Jun 2014
Risks of RBA talking down AUD mount - RBS
FXStreet (Bali) - The risks are growing about the possibility that the RBA sounds more concerned about the AUD, according to FX Strategists at RBS.
Key Quotes
"The RBA decision is due and leads off a busy event week in Australia that includes the RBA decision, first quarter GDP growth, and the April trade balance and retail sales. We see a risk that the RBA expresses heightened concern about the strength of the AUD at the June meeting."
"The relatively rapid slide in iron ore prices in particular, paired with the Bank's slightly lower growth forecasts released in the SoMP, may leave the Bank more concerned with recent strengthening of the AUD."
"Still, looking beyond the RBA decision we anticipate the domestic data should come in on the positive side, which along with the improvement in the manufacturing PMI in China, may keep upward pressure on Australian rates and the AUD despite risks that the RBA sounds more concerned about the AUD."
Key Quotes
"The RBA decision is due and leads off a busy event week in Australia that includes the RBA decision, first quarter GDP growth, and the April trade balance and retail sales. We see a risk that the RBA expresses heightened concern about the strength of the AUD at the June meeting."
"The relatively rapid slide in iron ore prices in particular, paired with the Bank's slightly lower growth forecasts released in the SoMP, may leave the Bank more concerned with recent strengthening of the AUD."
"Still, looking beyond the RBA decision we anticipate the domestic data should come in on the positive side, which along with the improvement in the manufacturing PMI in China, may keep upward pressure on Australian rates and the AUD despite risks that the RBA sounds more concerned about the AUD."