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15 Jul 2013
Flash: AUD/USD exposed to 0.80/0.85 fall - RBS
FXstreet.com (Barcelona) - The trend under-performance of the AUD/USDexchange rate is likely to persist, notes Greg Gibbs, FX Strategist at RBS, although admitting that "the recent momentum in Chinese market indicators; including commodity prices and equities have firmed in recent weeks, which may lead to a more stable AUD above 90 for the time being."
Gibbs reminds us of the old correlation between the AUD/USD and overall US equities as no longer valid since April, with the AUD now "trying to reconnect with weak mining and steel sector equities that have sharply under-performed the broader market since 2011" Gibbs said. In view of the RBS Strategist, "AUD perhaps has further to go to reflect the under-performance of these sectors since mid-2009, thus a fall to 80 to 85 is possible."
Gibbs reminds us of the old correlation between the AUD/USD and overall US equities as no longer valid since April, with the AUD now "trying to reconnect with weak mining and steel sector equities that have sharply under-performed the broader market since 2011" Gibbs said. In view of the RBS Strategist, "AUD perhaps has further to go to reflect the under-performance of these sectors since mid-2009, thus a fall to 80 to 85 is possible."