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17 Jul 2013
Flash: AUD downside likely limited – BMO Capital Markets
FXstreet.com (New York) - According to Stephen Gallo at BMO Capital Markets We suspect the bulk of today’s move in the AUD reflects some combination of stretched downside positioning and no explicit hints in the RBA minutes of an intent to cut rates further, rather than any significant change in tone.”
Perhaps more importantly, the RBA’s July 2 statement contained the same usage of the word “appropriate”, with the main difference being that the minutes added the reference to the exchange rate in the same line. “So whilst it’s very important not to get too worked-up about the minutes today, if the August RBA statement reflects the same tone towards the level of the currency, it’s quite likely that AUD downside will thereafter remain more limited than it did during Q2 until circumstances change.” Gallo notes.
Perhaps more importantly, the RBA’s July 2 statement contained the same usage of the word “appropriate”, with the main difference being that the minutes added the reference to the exchange rate in the same line. “So whilst it’s very important not to get too worked-up about the minutes today, if the August RBA statement reflects the same tone towards the level of the currency, it’s quite likely that AUD downside will thereafter remain more limited than it did during Q2 until circumstances change.” Gallo notes.