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28 Nov 2013
Flash: Capex may help the AUD recover in the near term - RBS
FXstreet.com (Barcelona) - The Australian Dollar is trading unusually strong - if one takes last week as indication - , up threatening 0.9135/45 resistance, following a stronger capital expenditure survey in Australia. Amid the improved data, Greg Gibbs, FX Strategist at RBS, thinks that this may help the AUD recover in the near term.
Key Quotes
"However, the data picture for the AUD has been generally better than expected for some months. It will not dispel the main problem that the resource investment outlook has weakened further, the market is demanding a higher risk premium for a more uncertain growth outlook in China as it tightens monetary conditions, and it is using AUD as a proxy for Asia EM that is nervously waiting for the Fed to begin tapering its QE policy. And, a further fall in JPY is likely to also weigh on the AUD."
"Nevertheless, the outlook for growth in Australia is generally not as bad as it may seem if you were to focus only on the resources sector. The housing market is recovering and other industries are also beginning to turn more positive."
"The Capital Expenditure survey showed overall the investment intentions are better than would have been expected, led by a solid gain in other selected industries. Overall intentions rose more or less in line with the historical pattern from the previous quarter and were 2% lower than the same estimate a year earlier."
Key Quotes
"However, the data picture for the AUD has been generally better than expected for some months. It will not dispel the main problem that the resource investment outlook has weakened further, the market is demanding a higher risk premium for a more uncertain growth outlook in China as it tightens monetary conditions, and it is using AUD as a proxy for Asia EM that is nervously waiting for the Fed to begin tapering its QE policy. And, a further fall in JPY is likely to also weigh on the AUD."
"Nevertheless, the outlook for growth in Australia is generally not as bad as it may seem if you were to focus only on the resources sector. The housing market is recovering and other industries are also beginning to turn more positive."
"The Capital Expenditure survey showed overall the investment intentions are better than would have been expected, led by a solid gain in other selected industries. Overall intentions rose more or less in line with the historical pattern from the previous quarter and were 2% lower than the same estimate a year earlier."