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13 Jun 2013
Flash: More to go in AUD/USD? - DBS
FXstreet.com (London) - Research teams at DBS Group said that the AUD/USD has bounced off its 0.9326 low seen two days earlier.
AUD/USD record short positions
They explain that the May/June volatility is increasingly viewed as an unwinding of risk trades on prospect that the US Federal Reserve may start to normalize monetary policy again. “The record short AUD positions reported by speculators should affirm that AUD has made most of these adjustments”. They said in order to push the currency lower, one would have to make the case for the Australian and east Asian economies to falter further and/or stronger conviction that the Fed would taper asset purchases sooner than later.
AUD/USD subject to commodity prices
DBS remind us that weaker demand from Asia would mean lower commodity prices, to which the Fed has highlighted is exerting what it hopes is transitory downward pressure on US inflation. The situation in AUD is, to some extent, like the “weak yen, strong Nikkei” story running into trouble with higher JGB yields
AUD/USD record short positions
They explain that the May/June volatility is increasingly viewed as an unwinding of risk trades on prospect that the US Federal Reserve may start to normalize monetary policy again. “The record short AUD positions reported by speculators should affirm that AUD has made most of these adjustments”. They said in order to push the currency lower, one would have to make the case for the Australian and east Asian economies to falter further and/or stronger conviction that the Fed would taper asset purchases sooner than later.
AUD/USD subject to commodity prices
DBS remind us that weaker demand from Asia would mean lower commodity prices, to which the Fed has highlighted is exerting what it hopes is transitory downward pressure on US inflation. The situation in AUD is, to some extent, like the “weak yen, strong Nikkei” story running into trouble with higher JGB yields