- Australia’s underlying inflation fell to lowest level in 14 years
- Iron Ore prices fall by almost 7% as demand from China eases
- Plenty of verbal intervention from FinMin Azumi but no action taken
- NZ business confidence sags
- Japan CSPI -0.1% YoY
- Regional stocks fall by around 0.5% on average
- Nothing new on EFSF front
- Gold adds a bit to overnight gains, currently $1715/oz
The only volatility has been seen in the AUD, with the other majors trading in 40 pip ranges.
AUD/USD spent much of the morning session trading around 1.0425 but it fell heavily after the much lower inflation figure made a 25 bps rate cut on Tuesday a virtual certainty (barring any major EZ debt turmoil). AUD/USD fell to 1.0365 and then consolidated for a few hours in a 20 pip range 1.0365/85, before breaking lower again. The AUD was also sold quite aggressively on the crosses, with EUR/AUD getting the most mentions. Ranges: 1.0351/1.0436
EUR/USD remains in a holding mood ahead of any EFSF announcements. ACBs and Middle East Sovereigns are still in dip-buying mode but haven’t been spotted today in Asia. EUR/AUD buying did help support through the latter part of the session. Ranges: 1.3891/1.3936.
USD/JPY has again been quiet despite plenty of verbal intervention from Azumi. Unconfirmed reports that Kampo is on bid at 75.70. Ranges: 75.94/76.15
Cable 1.5988/1.6036; USD/CHF .8767/89
