Plenty more RBA rate cuts to come - Alistair Cotton, Currencies Direct



PLENTY MORE RBA RATE CUTS TO COME - ALISTAIR COTTON, CURRENCIES DIRECT The Reserve Bank of Australia (RBA) cut its main cash rate by to a record low of 2.5 percent system.scripts.on Tuesday as it tries to prepare the economy for life after the mining boom. More cuts are on their way, says Alistair Cotton, FX analyst at Currencies Direct. SHOWS: LONDON, ENGLAND, UK (AUG 06, 2013) (REUTERS - ACCESS ALL) 1. CURRENCIES DIRECT, SENIOR FX ANALYST, ALISTAIR COTTON, SAYING: JOURNALIST ASKING ALISTAIR COTTON: "Aussie got a little bit of a bounce on the back of this cart. Was that a surprise?" ALISTAIR COTTON: "A little bit, yeah. I mean if you look forward, the RBA are very likely to cut rates again and as they rebalance the economy away from exports of natural materials to China, the exchange rate has to fall further. And there's probably another AUD0.05 or AUD0.10 or so over the next couple of weeks, so we're seeing-" JOURNALIST: "Alright. We're off 15% since April." COTTON: "Yeah." JOURNALIST: "So you say it's got a way to go." COTTON: "Yeah." JOURNALIST: "What if anything's going to spoil the Aussie?" Well I personally think it's a bit of a one-way bet. I don't think anything's going to support the Aussie going forward unless they hold rates for some reason in the near future, but I don't think the market thinks there's even a slight possibility going forward. JOURNALIST: "No forward rate guidance either from the RBA which surprised some. But as you say, expectations are for another 25 basis points." COTTON: "Absolutely, yeah." JOURNALIST: "Alright. Eurozone, PMIs suggesting we're going to exit recession in Q3. We've got Italian GDP numbers today, they look to be a little bit better than expectations. Market not so worried about Berlusconi anymore and Italy. What are you saying on the Euro?" COTTON: "Well it's about how quickly we exit this recession really. The market's pricing in that it's going to be Q3. So anything better than that, that should be reasonably Euro positive and it also depends on the ECB as well whether they cut rates a...

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