Scope for AUDUSD downside as RBA easing expectations rebuild

From the FXWW Chatroom – China August trade data showed a greater than expected fall in both imports and exports, declining 18.8% y/y and 6.9% y/y respectively. We continue to see little upside for the G10 commodity bloc currencies amid rising US yields and uncertainty about domestic economic outlooks. We hold a short AUDUSD trade recommendation via a 0.70 put with a 0.64 RKO (expiring 5-Feb- 16) going into Australia’s October jobs report on Thursday. A decline of 10k jobs in line with our economists’ forecasts should encourage a rebuilding of expectations for early 2016 easing. Following last Friday’s NFPs, rates markets now only price a full 25bp RBA cut by September next year. [BNPP] 

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