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19 May 2014
Expect the AUD to underperform - RBS
FXStreet (Bali) - Greg Gibbs, FX Trading Strategist at RBS, provides his view on the latest developments out of India, Malaysia and FX.
Key Quotes
"India is likely to become a focal point for global investors as they watch closely for evidence of a new awakening. Market hopes are likely to be buoyed by strong leadership from PM Modi and RBI Governor Rajan."
"The INR is sitting near important supports but major long-term trend breaks beckon. The MYR also looks set to attract more demand after a much stronger-than-expected GDP, recovery in its current account surplus and recent rise in rates on warnings from BNM Governor Zeti that hikes may be coming."
"However, confidence in the broader Asia region is likely to be kept in check by a weaker property market in China. Iron ore prices in China have continued to fall."
"It will take time for India to rise to replace China as a positive story for commodities, in our view. As such, we expect the AUD to underperform in the region. The EUR and JPY might be considered better funding currencies moving forward as recovery moves steadily forward in the US."
Key Quotes
"India is likely to become a focal point for global investors as they watch closely for evidence of a new awakening. Market hopes are likely to be buoyed by strong leadership from PM Modi and RBI Governor Rajan."
"The INR is sitting near important supports but major long-term trend breaks beckon. The MYR also looks set to attract more demand after a much stronger-than-expected GDP, recovery in its current account surplus and recent rise in rates on warnings from BNM Governor Zeti that hikes may be coming."
"However, confidence in the broader Asia region is likely to be kept in check by a weaker property market in China. Iron ore prices in China have continued to fall."
"It will take time for India to rise to replace China as a positive story for commodities, in our view. As such, we expect the AUD to underperform in the region. The EUR and JPY might be considered better funding currencies moving forward as recovery moves steadily forward in the US."