Feb

4

Aussie Thoughts, from Craig Mee

February 4, 2014 |

 I'm rather nervous about the ability of the EUR to hold on after much gain against the likes of the aussie, cad and old mate yen. Maybe like golf we can work back from the putting green, and others can drive home a more macro view why this may indeed be the case.

Besides rates, the last x period has taken out any overdone goodwill built into the Aussie-China trade partnership during the commodity boom. Now it's back into a form of value, but whether against EUR or USD, that's open to debate.

Today EUR/AUD RBA announced no cuts with the sign off: "In the Board's judgement, monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target. On present indications, the most prudent course is likely to be a period of stability in interest rates."

So at least on the aussie side this is conductive to the pair continuing to flatten.


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