Aud/usd Likely to be a Lot Closer to 0.80 by the End of the Year

Quotes from Societe Generale Cross Asset Research:

-A 0.8% q/q increase in Australia’s CPI took inflation to 2.7% y/y from 2.2%, severely reducing the chances of any further rate cuts and as a consequence triggered a squeeze higher in AUD/USD. A deteriorating terms of trade, a currency that remains overvalued and a weakening labour market won’t be helped by the news that consumers are facing more inflation, but the short AUD trade is popular and this is obviously a catalyst for the market to cut back positions and take stock. We still expect AUD/USD to be a lot closer to 0.80 by the end of the year. The material has been provided by InstaForex Company – www.instaforex.com

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