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FXstreet.com (Barcelona) - According to the Global Markets Strategist Sean Callow at Westpac, "We see the EUR/USD outperforming AUD/USD, despite the latter's stunning surge into QE2 in Nov 2010." Moreover, while iron ore prices have rebounded to one month highs, cancellation of mining projects (especially coal) continue and the RBA's Sep minutes reinforced the risk of a rate cut on 2 October.

"Adding to the AUD woes are concerns over the Chinese slowdown, which are unlikely to abate ahead of Q3 GDP on 18 October, especially since local media continues to play down hopes of major fiscal stimulus." Callow adds. On the more positive side for China jitters, it appears that the Party Congress will proceed on 10 Oct and the presumed next president, Xi Jinping, has reappeared. "This should help reduce fears that politicking will distract China's leadership from the slowing economy, not that we placed much weight on these. MYR and INR remain our preferred Asian currencies." he notes.

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