Ilan Dekell, head of macro for global fixed income at AMP Capital

This is via Bloomberg, out overnight.

Says an RBA rate cut is being priced in

But, if its not delivered:

  • "the market will reassess and that will lead to the Aussie dollar to continue to rally
  • Particularly in a backdrop where equities, risk assets, are being supported in an environment where the U.S. is not looking to hike rates. "
  • AUD could also benefit from higher iron ore prices
  • And, "If the risk seeking environment continues, the Aussie dollar remains supported"

Dekell, though, is a seller of the AUD:

  • He would consider it "expensive" as it approaches 80 cents
  • "Be clear, I wouldn't be buying the Aussie dollar for that trade
  • I would be looking for that move, to position the other way. I'm looking for that opportunity because I do think when the currency goes to that level, it just puts more pressure on the central bank to cut rates."