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13 Sep 2013
Flash: AUD/USD poised for fall to 0.88 within a month – UBS
FXstreet.com (Lisbon) - The latest IMF survey put reserve manager AUD holdings at $98 bn – if we allow for the fact that some large central banks do not participate in that survey, global AUD reserves are probably worth closer to $180 bn.
Key quotes
However, “Japanese investors in general hold even more AUD than this - up to $191 bn worth according to the BoJ. It follows that decisions made by Japanese investors can have a material bearing on the currency. Granted, Toushin investors only represent a subset of the wider Japanese real money investor community, but their positioning information is both a barometer and a crystal ball.”
“Toushin investors tend to be more risk-seeking than other members of Japan's real money community. If Toushins are pulling out of AUD, they are likely not alone. FX holdings for Toushins are released a month sooner than for other real money investors. So these data are useful leading indicators for wider investor sentiment. With AUD selling still underway, we keep our 1m and 3m AUDUSD forecasts at 0.88.”
Key quotes
However, “Japanese investors in general hold even more AUD than this - up to $191 bn worth according to the BoJ. It follows that decisions made by Japanese investors can have a material bearing on the currency. Granted, Toushin investors only represent a subset of the wider Japanese real money investor community, but their positioning information is both a barometer and a crystal ball.”
“Toushin investors tend to be more risk-seeking than other members of Japan's real money community. If Toushins are pulling out of AUD, they are likely not alone. FX holdings for Toushins are released a month sooner than for other real money investors. So these data are useful leading indicators for wider investor sentiment. With AUD selling still underway, we keep our 1m and 3m AUDUSD forecasts at 0.88.”