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18 Jun 2013
Flash: Commodity based currencies could see reprieve on FOMC – Westpac
FXstreet.com (New York) - To be sure, the FOMC meeting this week will be critical in determining the near-term path for commodity currencies.
According to Robert Rennie, an analyst at Westpac, “Our base case remains that Bernanke should repeat that the Fed is on course to consider tapering in coming months if the economy does not falter, but leave the statement unchanged. Such an outcome should give commodity currencies something of a short-term reprieve.”
We have therefore added 1/3 unit long AUD/JPY at 91.03 to our Forex Focus portfolio and will add another 1/3 unit on dips to 89.50. We will run a stop on this below 89.00. By reducing the capital size to 2/3 unit, we aim to limit our stop to 1%. Our objective for a bounce in AUD/JPY would be for a return towards the 94.00 area before selling returns.
According to Robert Rennie, an analyst at Westpac, “Our base case remains that Bernanke should repeat that the Fed is on course to consider tapering in coming months if the economy does not falter, but leave the statement unchanged. Such an outcome should give commodity currencies something of a short-term reprieve.”
We have therefore added 1/3 unit long AUD/JPY at 91.03 to our Forex Focus portfolio and will add another 1/3 unit on dips to 89.50. We will run a stop on this below 89.00. By reducing the capital size to 2/3 unit, we aim to limit our stop to 1%. Our objective for a bounce in AUD/JPY would be for a return towards the 94.00 area before selling returns.