Flash: AUD/USD to feel pinch from investors? – UBS

FXstreet.com (Lisbon) - Japan's retreat out of Australian dollar assets continues – this matters because Japanese investors hold enormous quantities of AUD, more than all FX reserve managers combined, notes Gareth Berry a Research analyst at UBS.

Key quotes

“AUD holdings of Toushin investors fell again in August, dropping 4.3% m/m. These investors have been steadily reducing their exposure for over a year now. Even aggressive BoJ easing on April 4 has failed to reverse the trend.”

“The reason is clear - successive RBA rate cuts have systematically undermined the currency's yield advantage, and the August cut inflicted further damage.”