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22 Aug 2014
AUDUSD needs fall below 0.90 for RBA rate hike in early 2015 - TDS
FXStreet (Bali) - Annette Beacher and Prash Newnaha, FX Strategist at Societe Generale, note that their case for a higher cash rate in early 2015 by the RBA relies on the AUD falling to USD0.90 by year end.
Key Quotes
"The RBA Board Meeting Minutes and monetary policy testimony repeated Stevens’ conviction that the AUD will be much lower in the medium term, via a fresh phrase “the exchange rate is well above its level in late January, notwithstanding lower commodity prices and a narrowing in interest rate differentials between Australia and most other advanced economies since then”. The Governor hinted again at the missing link in the AUD-depreciation chain, the not-strong-enough USD. Our case for a higher cash rate in early 2015 relies on the AUD falling to USD0.90 by year end, via a stronger USD."
Key Quotes
"The RBA Board Meeting Minutes and monetary policy testimony repeated Stevens’ conviction that the AUD will be much lower in the medium term, via a fresh phrase “the exchange rate is well above its level in late January, notwithstanding lower commodity prices and a narrowing in interest rate differentials between Australia and most other advanced economies since then”. The Governor hinted again at the missing link in the AUD-depreciation chain, the not-strong-enough USD. Our case for a higher cash rate in early 2015 relies on the AUD falling to USD0.90 by year end, via a stronger USD."