- China’s government pension fund to embark on a multi billion dollar international buying spree.
- Obama says risks to US economy still remain.
- EBC’s Smaghi says must not overstate deflation risks.
- Trichet says there is room to cut rates by a further 0.25%
- Australia Q1 PPI -0.4%, well outside expectations of +0.6%
The China government pension fund story saw early morning gains in both EURUSD and AUDUSD. However once the kneejerk buying was out of the way and no follow through was seen, both pairs declined as the market focused once more on the uncertainty of what policy steps the EBC will take next. EURUSD was smashed to a 1 month low down to 1.2966. AUDUSD ran into strong offers at 7250 follwing the EURO down in tandem, under 72c. The Australian Q1 PPI then added further selling pressure to the AUDUSD, coming in at -0.4% and well outside the expected +0.6%.
USDJPY held for most of the morning until EURJPY selling mid morning saw the USDJPY finally give way for a fall under 99.00, down to 98.61.
GBP followed suit, with the recent failure above 1.500 saw longs exiting down to 1.4700.
The afternoon saw a mild recovery with a slightly short EURUSD market buying it back up to 1.3015 and EURJPY back up to 128.80. AUDUSD found good bids at 7150 and AUDJPY buying interest at 70.60 to lift it back towards 72c.
Personally the level to watch on EURUSD is 1.2950. If we can hold there, we might see some sort of rally towards 1.3200.
Ranges…
AUDUSD 7151 -7245
EURUSD 1.2966 – 1.3075
GBPUSD 1.4703 – 1.4815
USDJPY 98.61 – 99.40
EURJPY 128.14 – 129.53
Goodluck
Sam