AUD winning the lost ground, at last – SocGen

By FXStreet FXStreet (Delhi) – Research Team at Societe Generale, suggest that the rebound in global risk sentiment and improved financial conditions have helped the AUD to win back ground in October after three months of losses and the rally in the currency dovetails with the seasonal gain in Chinese equity markets.

Key Quotes

“Following better-than-expected Q3 GDP data from China this morning, investors may be inclined to raise short-term targets for the AUD before the next RBA meeting and China PMI
data in early November. Though market speculation of another cut in the cash rate target (2.0%) has increased, net short AUD IMM positions have fallen to a three-month low.”

“Australia 90-day bill futures have rallied across the curve since last week, implying a higher chance of a 25bp rate cut by the RBA at some point over the next six to eight months.”

“After having cut its benchmark rate to 2.0% in May, the RBA has dropped its explicit easing
bias and believes that monetary policy is appropriate to support economic growth. The RBA next meets on 3 November but may be disinclined to cut the cost of borrowing after the Chinese Q3 GDP data proved better than feared.”

“For AUD/USD, the 5.7% rally this month on …read more

Source:: FX Street