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26 Jan 2015
AUD/USD hits fresh multi-year low below 0.7880
FXStreet (Bali) - AUD/USD is trading at a fresh multi-year low at 0.7870, marginally surpassing last Friday's cheapest level of 0.7883, with the market still aggressively pricing in easier monetary policies by the RBA this year.
Last Friday, after taking out 0.80, it was a one-way traffic in favour of sellers for a battered Australian Dollar, with any little buying providing virtually no bounces even if earlier on Friday Asia we saw a Chinese HSBC PMI hitting a 2-month high at 49.80 vs 49.6 exp. The news offered an excellent excuses to reload AUD shorts by the smart money community at better price levels, ahead of Wednesday's critical Australian CPI numbers. While some position squaring ahead of Aus data might be due given the sharp fall from last week, the clean breakout of 0.80 suggests more pain ahead for the Australian Dollar.
Jim Langlands, Founder at FXCharts, notes: "Today is the Australia Day Holiday and liquidity will be thin and driven by offshore interests. The major focus this week will be on the outcome of the FOMC Meeting and Australian CPI release, the latter of which will be key to the thoughts of the RBA at next Tuesday’s meeting. Most analysts appear to think the RBA will remain on hold , but some analysts think the RBA will cut by 25bp. Westpac in particular seem pretty adamant that they will cut, and they may have a point following the surprise cut last week by the BoC, although personally, I suspect that the current sharp decline in the Aud, which in itself is akin to a rate cut, may see the RBA err on the side of caution in order to keep their firepower up their sleeve."
Last Friday, after taking out 0.80, it was a one-way traffic in favour of sellers for a battered Australian Dollar, with any little buying providing virtually no bounces even if earlier on Friday Asia we saw a Chinese HSBC PMI hitting a 2-month high at 49.80 vs 49.6 exp. The news offered an excellent excuses to reload AUD shorts by the smart money community at better price levels, ahead of Wednesday's critical Australian CPI numbers. While some position squaring ahead of Aus data might be due given the sharp fall from last week, the clean breakout of 0.80 suggests more pain ahead for the Australian Dollar.
Jim Langlands, Founder at FXCharts, notes: "Today is the Australia Day Holiday and liquidity will be thin and driven by offshore interests. The major focus this week will be on the outcome of the FOMC Meeting and Australian CPI release, the latter of which will be key to the thoughts of the RBA at next Tuesday’s meeting. Most analysts appear to think the RBA will remain on hold , but some analysts think the RBA will cut by 25bp. Westpac in particular seem pretty adamant that they will cut, and they may have a point following the surprise cut last week by the BoC, although personally, I suspect that the current sharp decline in the Aud, which in itself is akin to a rate cut, may see the RBA err on the side of caution in order to keep their firepower up their sleeve."