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11 Feb 2014
Flash: AUD/USD would keep the high 0.80s in 2014 - BAML
FXStreet (Barcelona) - Adarsh Sinha, FX Strategist at Bank of America Merrill Lynch, expects the AUD/USD to trade in the upper 0.80s during 2014.
Key Quotes
"We learned three things about Australia last week, all of which caught investors - particularly those bearish on the AUD - somewhat off-guard. First, the RBA no longer views the current level of the exchange rate as "uncomfortably high"."
"Second, the RBA's shift to a neutral stance was primarily driven by increasing concern around inflation risks. Third, Australia posted a surprise trade surplus in both November and December last year, sooner than expected by most economists."
"These developments are all consistent with our long-held view that the AUD will be relatively range-bound in the high 0.80s vs. the USD during the course of 2014. However, far from implying there are limited trading opportunities, we believe the squeeze higher in the AUD as well as the collapse in volatility following last week's events offer attractive entry points for investors, based on our longer-term outlook for the exchange rate."
Key Quotes
"We learned three things about Australia last week, all of which caught investors - particularly those bearish on the AUD - somewhat off-guard. First, the RBA no longer views the current level of the exchange rate as "uncomfortably high"."
"Second, the RBA's shift to a neutral stance was primarily driven by increasing concern around inflation risks. Third, Australia posted a surprise trade surplus in both November and December last year, sooner than expected by most economists."
"These developments are all consistent with our long-held view that the AUD will be relatively range-bound in the high 0.80s vs. the USD during the course of 2014. However, far from implying there are limited trading opportunities, we believe the squeeze higher in the AUD as well as the collapse in volatility following last week's events offer attractive entry points for investors, based on our longer-term outlook for the exchange rate."