26 Mar 2014
Will RBA Stevens talk down the Aussie?
FXStreet (Bali) - Today’s attention during the Asian session will be on RBA Governor Glenn Stevens’s speech, at 3.30 GMT and also at 6 GMT, when Stevens will participate in a panel discussion.
The AUD/USD is currently trading firm circa 0.9160, with traders sidelined ahead of risk headlines. There are concerns that given the recent appreciation in the Australian Dollar, Stevens will take this opportunity to remind the market about the undesirable high AUD levels.
BofAML strategist, however, think it is unlikely Stevens will talk down the AUD, mainly for two reasons.
From BofAML: "Firstly, the recent appreciation has been at least partly related to positive domestic news and sentiment. Secondly, the private nature of the conference, where he speaks, suggests to us the Governor is unlikely to use this forum to significantly alter the RBA’s exchange rate stance (and indeed its monetary policy stance more generally)."
There are some sectors of the market who believe the RBA has become more flexible on letting the currency fluctuate without having to step up the rhetoric, as reflected in the omission to talk down the currency in recent RBA policy statement, as opposed to a more aggressive language last year.
These traders are only expecting the RBA to resume the talk down in the AUD above 0.95. Making a call on what outcome to expect is honestly a lottery, so the best course of action for intraday traders is probably stay on the sidelines until risk headlines are out of the way.
The AUD/USD is currently trading firm circa 0.9160, with traders sidelined ahead of risk headlines. There are concerns that given the recent appreciation in the Australian Dollar, Stevens will take this opportunity to remind the market about the undesirable high AUD levels.
BofAML strategist, however, think it is unlikely Stevens will talk down the AUD, mainly for two reasons.
From BofAML: "Firstly, the recent appreciation has been at least partly related to positive domestic news and sentiment. Secondly, the private nature of the conference, where he speaks, suggests to us the Governor is unlikely to use this forum to significantly alter the RBA’s exchange rate stance (and indeed its monetary policy stance more generally)."
There are some sectors of the market who believe the RBA has become more flexible on letting the currency fluctuate without having to step up the rhetoric, as reflected in the omission to talk down the currency in recent RBA policy statement, as opposed to a more aggressive language last year.
These traders are only expecting the RBA to resume the talk down in the AUD above 0.95. Making a call on what outcome to expect is honestly a lottery, so the best course of action for intraday traders is probably stay on the sidelines until risk headlines are out of the way.