RBA governor reiterates AUD view

<p>RBA Governor Glenn Stevens caused the AUD to open lower this week following an article published in The Australian over the weekend where he reiterated […]</p>

RBA Governor Glenn Stevens caused the AUD to open lower this week following an article published in The Australian over the weekend where he reiterated his view on AUD. “That’s why we’ve said our sense is that some of the investors are maybe underestimating the probability of a material decline at some point. But I can’t say when that might be,” he said. RBA minutes from the June meeting are revealed tomorrow, where I expect further comments on the damage the AUD is doing to the Australian economy.

Sterling remains supported above 1.71, ahead of the UK CPI and employment data this week, with a positive merger and acquisition story. Shire is indicating to AbbVie that it would be willing to recommend an AbbVie offer at GBP 53.20 a share. The euro is trading back towards the 1.3640 level in early European trading. Concerns over the Portuguese banking system seem to have diminished for now despite an article in the FT that the Bank of Portugal has ordered an “urgent extra-ordinary meeting” of the board at Banco Espirito Santo to appoint a new executive board.

The main event this week will no doubt be Federal Reserve Chair Janet Yellen’s Humphrey-Hawkins testimony on Tuesday and Wednesday. The markets will be keen to see how she will reinforce the perception that the Federal Reserve is in no rush to normalise policy despite the recent run of strong US data. Fed watcher Jon Hilsenrath published an article headed ‘Rate Debate Heats Up Among Fed Officials’ where he suggests that the Fed Chair could reflect the recent improvement in the US labour market.

 

EUR/USD

Supports 1.3575-1.3530-1.3505 | Resistance 1.3655-1.3700-1.3750

 

USD/JPY

Supports 101.15-100.75-100.00 | Resistance 101.70-102.00-102.30

 



GBP/USD

Supports 1.7100-1.7065-1.7000 | Resistance 1.7160-1.7185-1.7200

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