Back
9 Jun 2014
AUD to benefit on China performnces
FXStreet (Guatemala) - Analysts at RBS explained that several positive headlines from China over the weekend and further developments there may well benefit the AUD.
Key Quotes:
“Several positive headlines from China over the weekend benefited riskier assets and higher beta currencies to start off the week, although the moves in G10 FX space have been fairly muted”.
“The PBOC announcement of targeting easing by reducing the Reserve Requirement Ratio for some financial institutions, while not broad in scope, reinforces the general theme of large economy central banks introducing or continuing to push accommodative policy stances”.
“China releases both CPI and PPI data for May and with the CPI well below the PBOC's target 3.5%, the bank retains flexibility to embark on monetary policy easing. Still, the PBOC's use of targeted measures may hint that it is not yet prepared to take a more wide reaching move in the near term”.
“Targeted easing in China and the improvement in China's trade surplus is likely most impactful for the AUD in the G10, which has a busy week of data releases itself. April home loans and investment data are released tomorrow ahead of May employment figures on June 11th (June 12th locally). Pro-cyclical easing in Europe paired with targeted easing in China both play positively for carry currencies and the AUD in our view”.
Key Quotes:
“Several positive headlines from China over the weekend benefited riskier assets and higher beta currencies to start off the week, although the moves in G10 FX space have been fairly muted”.
“The PBOC announcement of targeting easing by reducing the Reserve Requirement Ratio for some financial institutions, while not broad in scope, reinforces the general theme of large economy central banks introducing or continuing to push accommodative policy stances”.
“China releases both CPI and PPI data for May and with the CPI well below the PBOC's target 3.5%, the bank retains flexibility to embark on monetary policy easing. Still, the PBOC's use of targeted measures may hint that it is not yet prepared to take a more wide reaching move in the near term”.
“Targeted easing in China and the improvement in China's trade surplus is likely most impactful for the AUD in the G10, which has a busy week of data releases itself. April home loans and investment data are released tomorrow ahead of May employment figures on June 11th (June 12th locally). Pro-cyclical easing in Europe paired with targeted easing in China both play positively for carry currencies and the AUD in our view”.