Aussie likely to suffer in the near future
Wednesday, November 2, 2011
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Following the RBA rate cut yesterday, the Brown Brother Harriman FX team expects another 25bps cut in the months ahead, although they argue the nearly 100bps worth of cuts priced into the policy rate over the next year is excessive. AUD/USD trades at 1.0290 at present, following disappointing building permits.
What’s more, the analysts at BBH observe that according to the retail positions on the Tokyo Futures Exchange, many retail investors are actually short AUD, “indicating that investor participation in the recent rally was limited” they said.
Additionally, the team thinks that due to its relative strong economic fundamentals the AUD may remain attractive to reserve managers looking to diversify from EUR and USD. However, they are cautious in the mid term, saying: "For the time being global events are likely to dominate domestic ones and for sure a disorderly default in Greece is likely to see the AUD be among one of the worst performers in the G10.”
Source : fxstreet.com
What’s more, the analysts at BBH observe that according to the retail positions on the Tokyo Futures Exchange, many retail investors are actually short AUD, “indicating that investor participation in the recent rally was limited” they said.
Additionally, the team thinks that due to its relative strong economic fundamentals the AUD may remain attractive to reserve managers looking to diversify from EUR and USD. However, they are cautious in the mid term, saying: "For the time being global events are likely to dominate domestic ones and for sure a disorderly default in Greece is likely to see the AUD be among one of the worst performers in the G10.”
Source : fxstreet.com
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