30 Apr 2014
Long AUD not appropriate - ANZ
FXStreet (Bali) - Daniel Been, FX Strategist at ANZ, notes that the AUD still lacks the drivers to make it an attractive long recommendation for the bank's customers.
Key Quotes
"The appreciation of the AUD from its lows, up to AUD0.90 was driven by the positive shift in perceptions regarding the trajectory of the Australian economy, by a downplaying of the immediacy of the risks surrounding the Chinese financial system, and by a loss of momentum in the US data pulse."
"The move since then represents a departure from these fundamental drivers. We are now in a situation for the AUD where the move is being underpinned by momentum, liquidity, and little else."
"On a medium-term basis, for an investor this is not an attractive setup. While we continue to think that the US rates structure is somewhat ‘stuck’ in a range at low levels until the US economy breaks out, this is not enough to convince us that being long the AUD is appropriate."
Key Quotes
"The appreciation of the AUD from its lows, up to AUD0.90 was driven by the positive shift in perceptions regarding the trajectory of the Australian economy, by a downplaying of the immediacy of the risks surrounding the Chinese financial system, and by a loss of momentum in the US data pulse."
"The move since then represents a departure from these fundamental drivers. We are now in a situation for the AUD where the move is being underpinned by momentum, liquidity, and little else."
"On a medium-term basis, for an investor this is not an attractive setup. While we continue to think that the US rates structure is somewhat ‘stuck’ in a range at low levels until the US economy breaks out, this is not enough to convince us that being long the AUD is appropriate."