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21 Apr 2015
AUD/CAD: Stevens paves way for further downside – TDS
FXStreet (Barcelona) - FX Strategists at TD Securities share the outlook for AUD/CAD into the Australian CPI data release tomorrow, expecting a weak print to lead the pair lower below 0.9400 support.
Key Quotes
“There is a risk that the AUD bounces near-term, if the CPI data do not provide the “smoking gun” excuse for the RBA to cut rates next month. But with iron ore prices slumping (down 23% this year), Chinese growth slowing and Governor Stevens stating yesterday that he would be “surprised” if the AUD did not fall further—a green light to sell a currency if there ever was one—we think the AUD may struggle to improve significantly near-term.”
“Governor Stevens’ comments yesterday contrasted clearly with the more constructive tone of Governor Poloz, paving the way for more downside pressure on the AUDCAD cross; we think the next 24hours will be crucial for the near-term outlook.”
“If Australian CPI is weak enough to bolster expectations of additional rate cuts, we look for the AUDCAD cross to push under the 0.9400 support area and fall towards 0.91; an upside surprise in CPI might be the catalyst for a short-covering rally to the 0.96 area, however.”
Key Quotes
“There is a risk that the AUD bounces near-term, if the CPI data do not provide the “smoking gun” excuse for the RBA to cut rates next month. But with iron ore prices slumping (down 23% this year), Chinese growth slowing and Governor Stevens stating yesterday that he would be “surprised” if the AUD did not fall further—a green light to sell a currency if there ever was one—we think the AUD may struggle to improve significantly near-term.”
“Governor Stevens’ comments yesterday contrasted clearly with the more constructive tone of Governor Poloz, paving the way for more downside pressure on the AUDCAD cross; we think the next 24hours will be crucial for the near-term outlook.”
“If Australian CPI is weak enough to bolster expectations of additional rate cuts, we look for the AUDCAD cross to push under the 0.9400 support area and fall towards 0.91; an upside surprise in CPI might be the catalyst for a short-covering rally to the 0.96 area, however.”