- German constitutional court challenge to EZ bailouts begins today
- China services PMI 54.1 in June
- Moody’s says outlook for Chinese banking sector may turn negative
- Rumours of Chinese rate rise this weekend after article in Chinese press
- Australian balance goods/services better than expected at +A$2.3bln
- New Zealand business confidence sharply higher in Q2 at 27%
- Regional stockmarkets fall by 0.25% on average
- Gold $1497/oz; Oil $94.75/bbl
The USD has managed a fairly decent rally across the boards as mild risk aversion and persistent demand from real money funds helped swing the balance in favour of the greenback.
Once again the NZD was the first currency to move, printing fresh multi-decade highs above .8330 after the strong consumer confidence data. AUD/NZD also broke below recent support levels at 1.2900. The AUD/USD has had a bearish tone ahead of the RBA interest rate decision. Firstly falling on AUD/NZD selling and then being affected by the China interest rate rumours and the Moody’s statement on Chinese banks. The strong trade balance was ignored. Ranges: AUD/USD 1.0680/1.0746; AUD/NZD 1.2891/1.2945
EUR/USD opened around 1.4535, tried to rally early on some EUR/GBP flows but then turned sharply lower on general risk aversion. EUR/CHF selling also weighed as it broke back below 1.2300. Modest bids near 1.4520 and 1.4500/05 had little impact once the EUR/USD started falling but reported trailing stops below 1.4470 haven’t yet been triggered. Ranges: 1.4469/1.4553; EUR/CHF 1.2274/1.2339
USD/JPY rallied first-up as real money funds were seen buying the pair through 80.80 but EUR/JPY selling slowed down any momentum. Ranges: 80.69/81.10; EUR/JPY 117.20/61
Cable traded 1.6031/99 with some real money selling also noted there. EUR/GBP .9019/46; USD/CHF .8468/.8506.
