13 Dec 2013
Flash: AUD is already in the fair-value ball-park - RBS
FXstreet.com (Bali) - According to Greg Gibbs, FX Strategist at RBS, the conclusion after reading RBA Stevens interview is that from an FX point of view, by mentioning 85c "is closer to the mark", risk of intervention by the RBA below .90 is zero and it only rises above 50% if the AUD is above .95.
Key Quotes
"By mentioning .85, the Governor has actually helped set a floor that the market may buy well ahead of; shorts are probably already trimming positions today."
"By mentioning .85, Stevens does not really provide much incentive to sell below .90. Anything with an 8-handle is in the ball-park, unless of course there were to be a significant further fall in commodity prices."
"Regardless of Stevens view of where the ball-park fair-value is at this time, ultimately the AUD price action is bearish and the broad underlying fundamentals challenging. Neither is it likely that the RBA will intervene to support the AUD any time soon."
Key Quotes
"By mentioning .85, the Governor has actually helped set a floor that the market may buy well ahead of; shorts are probably already trimming positions today."
"By mentioning .85, Stevens does not really provide much incentive to sell below .90. Anything with an 8-handle is in the ball-park, unless of course there were to be a significant further fall in commodity prices."
"Regardless of Stevens view of where the ball-park fair-value is at this time, ultimately the AUD price action is bearish and the broad underlying fundamentals challenging. Neither is it likely that the RBA will intervene to support the AUD any time soon."