2 Dec 2014
AUD/USD sub 0.85 ahead of a more dovish RBA?
FXStreet (Bali) - AUD/USD trades some 10/15 odd pips sub 0.85 round number ahead of the Reserve Bank of Australia monetary policy decision, in which consensus remains for the Central Bank to retain its neutral bias.
However, it is worth noting growing chatter across trading desks over the possibility of the RBA shifting to a more dovish stance given the recent fall in commodity prices, likely to keep inflation in check, and as new macro-prudential measures are established in Australia, aimed to ease the upward price pressures.
Deutsche Bank has changed its rate calls in Australia, now expecting 50bp in cuts during 2015. Meanwhile, RBS, also notes that after last week's RBA's Lowe speech, it is possible that the RBA makes a reference to the possibility of rate cuts today.
Just out, Australia published improved economic data, with the current account balance coming in at -12.5B in Q3, above expectations (-13.6B), while building permits (MoM) came in at 11.4% in Oct, significantly above forecasts (5%).
Technically, Jim Langlands, Founder at FXCharts, notes: "0.8480 is now minor support, ahead of 0.8450 and the new trend low at 0.8416. Below there would see bids at 0.8400, a break of which would see a run towards the June 2010 low at 0.8315 and then to the May 2010 lows at 0.8066. On the topside, 0.8530/40 will be a tough hurdle to break above, but if successfully overcome, then look for a run back towards 0.8560. I don’t think we are heading above here in a hurry now, but we could see a return to last week’s squeeze up to 0.8615."
However, it is worth noting growing chatter across trading desks over the possibility of the RBA shifting to a more dovish stance given the recent fall in commodity prices, likely to keep inflation in check, and as new macro-prudential measures are established in Australia, aimed to ease the upward price pressures.
Deutsche Bank has changed its rate calls in Australia, now expecting 50bp in cuts during 2015. Meanwhile, RBS, also notes that after last week's RBA's Lowe speech, it is possible that the RBA makes a reference to the possibility of rate cuts today.
Just out, Australia published improved economic data, with the current account balance coming in at -12.5B in Q3, above expectations (-13.6B), while building permits (MoM) came in at 11.4% in Oct, significantly above forecasts (5%).
Technically, Jim Langlands, Founder at FXCharts, notes: "0.8480 is now minor support, ahead of 0.8450 and the new trend low at 0.8416. Below there would see bids at 0.8400, a break of which would see a run towards the June 2010 low at 0.8315 and then to the May 2010 lows at 0.8066. On the topside, 0.8530/40 will be a tough hurdle to break above, but if successfully overcome, then look for a run back towards 0.8560. I don’t think we are heading above here in a hurry now, but we could see a return to last week’s squeeze up to 0.8615."