Foreign exchange rates: Bullish outlook for Australian Dollar

Last Updated on Monday, 09 May 2011 09:27 Written by Will Peters Monday, 09 May 2011 09:25

A look at the Australian Dollar, New Zealand Dollar and the British Pound on Monday morning.

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The Pound Australian Dollar exchange rate is 0.981% lower with 1 GBP = 1.5185 AUD.

The Pound New Zealand Dollar exchange rate is 0.585% lower with 1 GBP = 2.0613 NZD.

The Australian Dollar New Zealand Dollar exchange rate is 0.399% higher with 1 AUD = 1.3575 NZD.

The outlook for the Australian Dollar is bullish suggests Sara Yates at Barclays Capital:

"Following the clearing out carry trades last week, we think that investors may begin to build back into these positions, especially given that the FOMC likely remains dovish following the payrolls data.

"This should be good news for the AUD.

"Our economists also expect Australian employment data to surprise significantly to the upside (employment: BarCap +32k, consensus +17k; unemployment: BarCap 4.8%, consensus 4.9%, previous 4.9%) and encourage the market to price in near-term rate hikes by the RBA, especially following its relatively hawkish MPS last week."

While Bullish on the Australian Dollar, Barclays is Neutral on the New Zealand Dollar:

"Housing data are expected by our economists to remain soft next week, which will continue to encourage the view that the RBNZ is a long way off raising rates. The NZD will continue to gain support from yield chasers, however, especially given that its valuation does not look as stretched as the AUDs."