SHOWS: SYDNEY, AUSTRALIA (September 3, 2014) (REUTERS - ACCESS ALL)

SEAN CALLOW, SENIOR CURRENCY STRATEGIST, WESTPAC

1. (QUESTION GRAPHIC)

'We had strong currency movements in the U.S. dollar overnight. What are your views on that?'

2. SEAN CALLOW SAYING:

'Well certainly it has been a very broad move, particular dollar-yen kicked things off. That's obviously positively correlated with the improvement in the Nikkei and that can be difficult to work out which was the real catalyst. But you've broken some levels, markets have been very quiet for the most part for the past few months. So it has triggered some movements and anticipation of further gains. Obviously the dollar-yen in particular has been a favorite in terms of the contrast between the BOJ policy stance and the Fed winding down QE. We also had a little bit of impetus from U.S. economic data, the manufacturing ISM and construction data added to the reasons to buy the U.S. dollar. So it's had a ripple effect, which has really, I think caught markets losing a little bit.'

3. (QUESTION GRAPHIC)

'What is your outlook for the Australian dollar given record low interest rates and the swift rise of the U.S. dollar recently?'

4. SEAN CALLOW SAYING:

'You are right in terms of growth. It is pretty mixed where sub-trends certainly into next year where we've got unemployment uncomfortably high, multi-year highs. So the Reserve Bank is hopeful about next year's economy that the investment will pick up and so remaining on hold for the time being. So that sort of plays neutral for the Aussie. But what we do have this widening gap between the Aussie and its fair value level because commodity prices had been particularly weak. We have seen iron ore prices touching lows, equal lows since 2009. And coal is weak as well. So for the most part, you've got a widening gap between the Aussie and its fair value level. But we think that will weigh on the currency towards about 90 by year-end, though we do think it picks up in 2015. So bit of a V-shaped outlook for the Aussie.'

5. (QUESTION GRAPHIC)

'What is the key trend in the currency markets right now?'

6. SEAN CALLOW SAYING:

'I think the short-term trend is to buy U.S. dollars. There are reasons to be selling the yen, the euro and sterling too ahead of the Scottish referendum that's coming in for some heavy selling. Not sure whether it will be really sustained against steady Asian currencies and the Aussie or Canadian dollar for instance, but for the time being, it is a strong dollar trend.'