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Veksler: Why the Aussie's set to fall further
The Aussie rose strongly following inflation data from Australia, only to drop against its major counterparts after a report showed manufacturing unexpectedly contracted in China.
Reserve Bank of Australia governor Glenn Stevens has made it no secret that he thinks the Australian dollar is "uncomfortably high" and would in fact like to see the Aussie dollar at USD 0.85. The RBA thinks a weaker currency will boost economic growth.
Ken Veksler, Director of Accumen Management, explains that markets have “taken the RBA’s comments to heart” and investors will now continue to get on the bandwagon and sell the Aussie until it gets to the 85 level. It’s only when that has happened that markets will be looking for what’s next.
Slower economic growth, a dovish central bank, expectations of weaker demand from China and more Fed tapering, have all helped weaken the commodity-linked currency.
Read more about Ken’s predictions here:
http://www.tradingfloor.com/posts/things-awry-rba-boe-battle-1074450727
01:33 minutes
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