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1 Jun 2015
RBA to again talk the dollar down – Deutsche Bank
FXStreet (Mumbai) - Adam Boyton, chief economist at Deutsche Bank expects the RBA policy statement to again ‘talk down the dollar’. Boyton sees no change in the cash rate tomorrow.
Key Quotes
“On the AUD we would expect the statement to again ‘talk the dollar down’. Words similar to those used in May: “The Australian dollar has declined noticeably against a rising US dollar over the past year, though less so against a basket of currencies. Further depreciation seems both likely and necessary, particularly given the significant declines in key commodity prices”; or those used in April “A lower exchange rate is likely to be needed to achieve balanced growth in the economy” would seem likely.”
“In the wake of last week’s capex data we would expect some discussion of the outlook for non-mining investment in the statement. Here any balancing of capex expectations for 2015-16 against feedback from the RBA’s liaison program, or other indicators of business investment, would be less ‘dovish’ than simply focusing on the results of the capex survey alone.”
Key Quotes
“On the AUD we would expect the statement to again ‘talk the dollar down’. Words similar to those used in May: “The Australian dollar has declined noticeably against a rising US dollar over the past year, though less so against a basket of currencies. Further depreciation seems both likely and necessary, particularly given the significant declines in key commodity prices”; or those used in April “A lower exchange rate is likely to be needed to achieve balanced growth in the economy” would seem likely.”
“In the wake of last week’s capex data we would expect some discussion of the outlook for non-mining investment in the statement. Here any balancing of capex expectations for 2015-16 against feedback from the RBA’s liaison program, or other indicators of business investment, would be less ‘dovish’ than simply focusing on the results of the capex survey alone.”