10 Jun 2013
Flash: Continue short AUD, may slide into 0.85/0.90 - RBS
FXstreet.com (Barcelona) - The Aussie fall could continue at a rapid clip, says Greg Gibbs, currency strategist at RBS.
Gibbs sees the AUD now moving quickly to price in several negative elements, including the end of the resources boom, a slow down in China that may become worse, and a weak Australian economy outside of the resources sector.
In view of Gibbs, the economic data this week could be quite telling in this regard, "with every reason to expect it to continue a recent weaker path" the strategist from RBS said.
According to Gibbs, it is possible that the loss of value in the AUD will continue to take over from interest rates as the main shock absorber for the Australian economic outlook. If so, "it will limit the RBA's hand to further cut rates" Gibbs said.
In conclusion, the analyst sees "a greater probability that the AUD slides into an .85/.90 range in coming weeks", thus Gibbs is inclined to go with a short position this week.
Gibbs sees the AUD now moving quickly to price in several negative elements, including the end of the resources boom, a slow down in China that may become worse, and a weak Australian economy outside of the resources sector.
In view of Gibbs, the economic data this week could be quite telling in this regard, "with every reason to expect it to continue a recent weaker path" the strategist from RBS said.
According to Gibbs, it is possible that the loss of value in the AUD will continue to take over from interest rates as the main shock absorber for the Australian economic outlook. If so, "it will limit the RBA's hand to further cut rates" Gibbs said.
In conclusion, the analyst sees "a greater probability that the AUD slides into an .85/.90 range in coming weeks", thus Gibbs is inclined to go with a short position this week.