Thursday, July 14, 2011

NAB: Aussie’s prospects in case of QE3 in the US

Yesterday the Federal Reserve’s Chairman Ben Bernanke claimed that the central bank will conduct more monetary stimulus in case of US economic growth slowdown.

Analysts at National Australia Bank claim that even if the Fed actually does more quantitative easing, Australian dollar won’t experience as big surge versus its US counterpart as the one seen at the beginning of this year.

The specialists note that in the last 2 rounds of QE the pair AUD/USD gained on average 7.0% in a month after the talk on the subject had begun and 11% in the six weeks afterwards. Aussie will be prevented from one more advance of that kind by the technical factors and the smaller size of any potential easing. Australian currency may rise from the current level to the levels in the $1.1100 area but it won’t manage to stay there for long. NAB strategists underlined that Australian dollar is already trading more than 20% above its fair value against the greenback.

Today Aussie eased down from highs in the $1.0790 area to the levels around $1.0740. 

Strategists at RBC Capital Markets note that the pair’s advance stemmed ahead of Italian debt auction. Resistance for the pair is at $1.0800. Economists at Barclays Capital have a more bullish point of view as they think that if AUD/USD gets above $1.0805, it will be able to climb to $1.0890 and then to this year’s maximum in the $1.1015 zone.

daily audusd 14-44
 
Chart. Daily AUD/USD

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