FXstreet.com (Barcelona) - According to Richard Yetsenga, Head of Global Markets Research, “The AUD will likely trade something like a safe haven, whether it genuinely is or not. Typically only current account surplus currencies run basic balance surpluses – the fact the AUD is, as a commodity exporter, is quite remarkable.”
That being said, “We expect the AUD, therefore, to trade with lower volatility and a more neutral volatility skew, than is historically normal. This means that currency moves will tend to be less rapid, and rallies will tend to occur with almost the same vigor as sell-offs.” he adds.
“Our work implies that the AUD is unlikely to weaken substantially against the USD until the FDI/investment pipeline turns sharply lower. At this stage this looks to be a mid to late 2013 story. This suggests playing any AUD vulnerabilities on the crosses; as has been our practice for some time.” Yetsenga notes.
That being said, “We expect the AUD, therefore, to trade with lower volatility and a more neutral volatility skew, than is historically normal. This means that currency moves will tend to be less rapid, and rallies will tend to occur with almost the same vigor as sell-offs.” he adds.
“Our work implies that the AUD is unlikely to weaken substantially against the USD until the FDI/investment pipeline turns sharply lower. At this stage this looks to be a mid to late 2013 story. This suggests playing any AUD vulnerabilities on the crosses; as has been our practice for some time.” Yetsenga notes.
