The Australian dollar has moved quite a lot last week, and this could certainly continue now.
The team at Citi suggests selling AUD/USD and provides two reasons:
Here is their view, courtesy of eFXnews:
Currency investors should consider selling AUD/USD this week, advises CitiFX in its weekly FX pick to clients.
Citi’s rationale behind this call is that AUD-specific events this week are only likely to heighten vulnerability on 2 fronts:
“First, we suspect Governor Stevens will leave the door explicitly open to additional easing in his speech. Given that money markets continue to price in limited risk for near-term easing following the surprisingly hawkish policy statement, there should be AUD downside on this,” Citi clarifies.
“Second, expectations are for a rise in Australian employment following the weak outcome last month. A failure to pick-up in line with expectations would be a bigger shock and would likely be taken as an indication that near-term cuts are back on the table. Given negative external conditions, with Chinese imports surprising on the downside today, there may be little to offset pass through to a lower AUD,” Citi adds.
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