Latest client note from the US investment bank 12 Aug 2016
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Say MS :
AUD: Bullish Following Rate Cut.
AUD’s
reaction to the rate cut is telling, given it ended the day over 1%
higher against USD despite the rate cut not being fully priced in. As
the hunt for yield remains strong and the RBA’s lack of an easing bias
indicates no easing catalyst any time soon, we expect AUD to appreciate
(particularly against USD). RBA Gov. Stevens’ outgoing speech also gave
no indication that further easing is imminent.