- Fed’s Fischer says ready with its exit strategy but deflationary pressures still the main issue.
- Australia August trade deficit larger than expected at A$-1524 Mln. Forecast was for A$-850 Mln.
- The UK Independent runs story on the “Demise of the Dollar”. Says Arab states have launched secret moves with China, Russia, Japan and France to stop using USD for Oil trading.
- The Story sets trend for USD sell off across the board in Asia.
- Australia September motor vehicle sales up 4.9% s/adj.
- Japan’s Fujii says BOJ should carefully consider the economic outlook before deciding whether rto end its corporate debt purchases in December.
- RBA raises interest rates by 25 bps, catches market by surprise.
- Asian Bourses slightly negative, give up early moring gains.
- Gold higher at 1019.00
- Oil flat at $70.45
The USD fell today on the back of a article in the UK Independent, saying that Gulf States were in secret talks with Russia, France, China and Japan to replace US Dollar with a basket of currencies in the trading of Oil. That along with the RBA lifting rates by 25 Bps saw the USD lower against a broad range of currencies.
USDJPY fell from it NY close to test the bids at 89.00, dipping just below with no follow thru on rumored stops. More bids are said to be scattered all the way back to 88.20.
EURUSD traded higher, pretty much in one direction, with very minimal pullbacks up towards 1.4700 after the US Dollar story hit the screens. It eventually tested the double top at 1.4720, riding the AUDUSD explosion higher after the rate rise announcement. EURJPY remained steady on the back of a bid EUR but exporter selling and offers towards 132.00 still weigh on the cross.
The main event risk today was the RBA rate decision. It was an outside chance which came thru, surprising the market. The AUDUSD remained unmoved by the morning release of the worse than expected trade deficit number, but exploded higher towards 8845 from 8765, once the RBA announced the 25 bps rate hike. The RBA said economic conditions in Australia are stronger than expected and measures of confidence have recovered and warned of more rate hikes to come. Market nows eyes 8860 with talk of stops above.
Ranges:
EURUSD 1.4644 – 1.4717
GBPUSD 1.5926 – 1.5988
USDJPY 88.96 – 89.65
EURJPY 130.70 – 131.44
AUDUSD 8753 – 8844
Goodluck,
Sam
