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AUD helping economy to adjust - UOB

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 2, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Guatemala) - Analysts at UOB Group explained that the RBA left the overnight cash rate unchanged for the seventh consecutive month at 2.00%, but the potential for further easing was intact. We see the cash rate staying at 2.00% for now, although the risk of lower inflation, coupled with the weak investment outlook, could eventually force the hands of the RBA.

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    Key Quotes:

    "At this juncture, we are keeping to our AUD/USD forecasts, looking for the pair to hover around the 0.710-region into year-end and into early-2016. Meanwhile, the Australian economy grew at a faster pace in the September quarter, suggesting that the post-mining boom transition could be less painful than estimates indicate. The seasonally-adjusted growth rate measured 0.9%, coming in slightly larger than expectations of 0.8%, and much greater than the 0.2% reading in the previous quarter."

    "Separately, RBA Governor Stevens told an audience earlier that whilst Australia’s terms of trade has sunk since the boom period of the mining-investment era, the Australian dollar is helping the economy adjust."
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