Short AUD on crosses, particularly vs GBP – Westpac
FXStreet (Bali) – Stevens’ reference to “ammunition” to lower the cash rate again helped drive markets to price a 50% chance of a rate cut by year-end, notes Sean Callow, FX Strategist at Westpac.
Along with the stronger language on AUD, this reinforces our existing preference to be short AUD on crosses, particularly versus GBP.
But the extent of the bearishness is tempered by our base case that rates remain on hold into 2015.
Next week’s June jobs data and the Q2 CPI on 23 July will of course be important ahead of the Aug RBA meeting and Statement on Monetary Policy.
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