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25 Nov 2013
Flash: AUD is a bear market - RBS
FXstreet.com (Barcelona) - AUD/USD is clearly on a bear market, notes Greg Gibbs, FX Strategist at RBS.
Key Quotes
"The AUD is more clearly in a bear market, reflecting the evidence that Australian's resources investment cycle is in decline, a sense that the restructuring/reform process in China is likely to see a steady decline in its growth over the medium term and its reforms increase risk of a significant disruption to growth."
"This week it would not surprise to see the AUD firm up a bit after its significant under-performance mostly on medium term factors and jawboning. There is little obvious catalyst for a continuation ahead of significant data points coming next week including Q3 GDP and RBA policy meeting."
"The Capital expenditure survey, while tending to be down-played by the RBA this year, will generate interest later this week, especially in what it says about investment intensions in the non-resource sector which the RBA is still expecting to be weak. An address by RBA Deputy Governor Lowe at a conference on productivity will also be watched for the latest thinking. It is unlikely, however, that he will attempt to lay on even thicker the jawboning from Governor Stevens."
Key Quotes
"The AUD is more clearly in a bear market, reflecting the evidence that Australian's resources investment cycle is in decline, a sense that the restructuring/reform process in China is likely to see a steady decline in its growth over the medium term and its reforms increase risk of a significant disruption to growth."
"This week it would not surprise to see the AUD firm up a bit after its significant under-performance mostly on medium term factors and jawboning. There is little obvious catalyst for a continuation ahead of significant data points coming next week including Q3 GDP and RBA policy meeting."
"The Capital expenditure survey, while tending to be down-played by the RBA this year, will generate interest later this week, especially in what it says about investment intensions in the non-resource sector which the RBA is still expecting to be weak. An address by RBA Deputy Governor Lowe at a conference on productivity will also be watched for the latest thinking. It is unlikely, however, that he will attempt to lay on even thicker the jawboning from Governor Stevens."