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9 Dec 2015
AUD outlook vs EUR - Euro rebound to continue – Westpac
FXStreet (Delhi) - Sean Callow, Research Analyst at Westpac, suggests that the ECB’s dovish tone at its Oct meeting helped drive AUD/EUR as high as 0.6950 (EUR/AUD down to 1.4350) last week as expectations for aggressive new easing measures reached a crescendo.
Key Quotes
“Market disappointment over the ECB’s cautious steps on 3 Dec should ensure AUD/EUR remains well short of last week’s highs. Indeed bounces should be capped ahead of 0.6750 (EUR/AUD dips should find buyers above 1.48).”
“But not all the rally in AUD against EUR between the 2 ECB meetings was due to EUR short positioning. Australia’s decent domestic data has cooled expectations for further RBA easing and the M&A pipeline into Australia remains substantial. This should help limit AUD losses to EUR0.65 (EUR/AUD 1.54) multi-week.”
Key Quotes
“Market disappointment over the ECB’s cautious steps on 3 Dec should ensure AUD/EUR remains well short of last week’s highs. Indeed bounces should be capped ahead of 0.6750 (EUR/AUD dips should find buyers above 1.48).”
“But not all the rally in AUD against EUR between the 2 ECB meetings was due to EUR short positioning. Australia’s decent domestic data has cooled expectations for further RBA easing and the M&A pipeline into Australia remains substantial. This should help limit AUD losses to EUR0.65 (EUR/AUD 1.54) multi-week.”