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4 May 2015
Barclays: RBA to cut rates in May, sell AUD/USD – eFXnews
FXStreet (Barcelona) - The Research Team at Barclays, expects the RBA to cut rates by 25bp to a record low of 2.00%, and AUD/USD to weaken towards 0.7680, as noted by eFXnews.
Key Quotes
"An under-priced RBA rate cut and strong US labor market report should push AUDUSD lower this week. We narrowly expect the RBA to cut rates by 25bp to a new record low of 2.00% .”
“The RBA has a strong easing bias, recently made clear by Governor Stevens’ in a New York speech, and we expect further easing to reflect concern over the investment outlook and the widening gap between the real exchange rate and the terms of trade.”
“We are mindful, though, that the RBA held fire in March and April and that the strength of housing, together with sticky underlying inflation and better labor market data, may give it pause for thought"
“Regardless, we expect the RBA to retain an easing bias to maintain downward pressure on the exchange rate.”
“In addition, our technical strategists are bearish AUDUSD. Last Wednesday’s topping candle has capped recent corrective gains and was confirmed by subsequent selling into the end of last week highlight May as being the most negative for AUDUSD versus its major currency peers and the most bearish month of the year for AUDUSD as measured by median and mean returns”
“This adds to our conviction for a move lower towards initial targets in the 0.7680 area. A move below the 0.7530 range lows would signal further downside towards our greater targets near 0.7100”
This content has been provided under specific arrangement with eFXnews.
Key Quotes
"An under-priced RBA rate cut and strong US labor market report should push AUDUSD lower this week. We narrowly expect the RBA to cut rates by 25bp to a new record low of 2.00% .”
“The RBA has a strong easing bias, recently made clear by Governor Stevens’ in a New York speech, and we expect further easing to reflect concern over the investment outlook and the widening gap between the real exchange rate and the terms of trade.”
“We are mindful, though, that the RBA held fire in March and April and that the strength of housing, together with sticky underlying inflation and better labor market data, may give it pause for thought"
“Regardless, we expect the RBA to retain an easing bias to maintain downward pressure on the exchange rate.”
“In addition, our technical strategists are bearish AUDUSD. Last Wednesday’s topping candle has capped recent corrective gains and was confirmed by subsequent selling into the end of last week highlight May as being the most negative for AUDUSD versus its major currency peers and the most bearish month of the year for AUDUSD as measured by median and mean returns”
“This adds to our conviction for a move lower towards initial targets in the 0.7680 area. A move below the 0.7530 range lows would signal further downside towards our greater targets near 0.7100”
This content has been provided under specific arrangement with eFXnews.