RBA preview – how will AUD/USD react?

By FXStreet FXStreet (Guatemala) – AUD/USD is approaching the RBA meeting with caution. While there is a 94% chance that the Central Bank are on hold, despite the opening turmoil this year, given the strength of the Australian Economy, it is what Stevens’ outlook on a number of areas that keep us apprehensive.

Analysts at ANZ explained that one of the clear themes in markets so far this year has been the sharp lift in volatility and nervousness brought about by Chinese economic weakness (yesterday’s PMI data hasn’t helped the cause). “How central banks have chosen to respond to this backdrop has been another key theme, and the preference appears to be for further easing (BoJ) or at least a signal that further policy easing is a real prospect (ECB and perhaps more reluctantly the RBNZ),” and further adding, “A challenged Chinese and global growth backdrop continues to leave the distribution of risks firmly tilted to the downside.”

“Chill-out”?

However, while China and global risks have been a clear threat to individual economies, the RBA’s tone of late has adopted the same attitude you might find on Bondi beach among the groups of happy go luck surfers. “Chill out”, was the …read more

Source:: FX Street