- Strong rumours in the market of a rate hike in China later this week
- RBA leaves rates and policy on hold
- UK retail sales show weak growth again
- Irish budget likely to pass later today
- California declares fiscal state of emergency
- Regional markets mixed; Gold $1423/oz; Oil $89/bbl
The Asian market focussed initially on the Californian announcement and tended towards USD selling with USD/JPY being initially the main target. Stops below barriers at 82.50 were targeted and triggered. Rumours of a Chinese rate hike also contributed as AUD/JPY selling hit the market. Momentum has been lacking and the JPY crosses have rebounded towards their opening levels. Ranges: USD/JPY 82.35/74, EUR/JPY 109.59/110.10
The AUD was relatively volatile albeit inside fairly tight ranges. AUD/USD opened around .9900, fell to session lows of .9873 when the Chinese rate hike rumours were at their loudest, rebounded on general USD selling, fell again after the RBA anouncement signalled a prolonged hold on rates and rebounded again from the same lows. Ranges: AUD/USD .9873/.9917
The EUR has been relatively sedate with modest USD selling and EUR short-covering ahead of the Irish budget ensuring that the pair rose by about 40 pips all up. Ranges: 1.3278/1.3353
Cable has been drifting higher throughout the session without ever really gaining any momentum. Ranges: Cable 1.5705/57, EUR/GBP .8456/81