- RBA leave rates on hold at 4.5%
- Statement highlights: Euro growth uncertain and pressure still on EZ banks; US labour market recovery slow; growth in China moderating; inflation in upper half of target zone; policy appropriate for moment
- Chinese property market at beginning of collapse: Rogoff
- New Japanese FinMin watching stock and FX markets closely
- Australian May balance goods and services +AUD1.6 billion
S&P futures were 1% lower in early trade following on from a 1% fall on Canadian markets and this led to an atmosphere of risk aversion in Asian FX markets, led once again by the AUD/JPY and EUR/CHF pairings.
AUD/USD opened at .8390 but after failing to retake .8400 in very early trade it fell below yesterdays’ .8375 low and only stalled when corporate bids entered the market around the .8320/30 level. The rebound on Asian stockmarkets helped the AUD recover pre-RBA decision. Range: .8318/99
USD/JPY tried on a few occasions to mount momentum for a test of 87.00 fuelled by selling in the cross pairs but the comments from the FinMin helped engineer a bounce on the Nikkei and the JPY crosses bounced as well. Ranges: USD/JPY 87.42/77, EUR/JPY 109.16/110.08.
EUR/USD fell under EUR/JPY and EUR/CHF selling and triggered stop-losses below 1.2490 before bouncing on the verbal intervention. EUR/CHF has remained heavy throughout the session, failing to bounce off its lows. Ranges: EUR/USD 1.2481/1.2545; EUR/CHF 1.3290/1.3356.
Cable has traded in a 1.5084/1.5144 range and EUR/GBP .8266/89.
