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20 Sep 2013
Flash: AUD/USD overstretched or more weakness in USD to come? –BTMU
FXstreet.com (London) - Less Hardman, strategist at The Bank of Tokyo-Mitsubishi UFJ commented on the position of the Fed, and subsequent market positioning.
Key Quotes:
“It is more uncertain now whether the Fed will begin to taper QE by year end even if the economic data improves should that lift US yields providing an offsetting negative risk for the Fed”.
“That uncertainty should help to keep the US dollar on the defensive in the near-term and encourage investors to rebuild carry positions boosting demand for high yielding and higher risk emerging currencies”.
“Within the G10 it should provide support for the Aussie and kiwi although upside is limited by already stretched overvaluation especially for the kiwi”.
Key Quotes:
“It is more uncertain now whether the Fed will begin to taper QE by year end even if the economic data improves should that lift US yields providing an offsetting negative risk for the Fed”.
“That uncertainty should help to keep the US dollar on the defensive in the near-term and encourage investors to rebuild carry positions boosting demand for high yielding and higher risk emerging currencies”.
“Within the G10 it should provide support for the Aussie and kiwi although upside is limited by already stretched overvaluation especially for the kiwi”.