- The AUD has fallen by around 0.7% after the PBOC surprised by not loosening policy
- The EUR fell after reports of Greek fury at proposed budgetary oversight by EU
- Greece and IIF expected to reach a deal this week
- Australian bond rally seen running out of steam
- Sarkozy confirms VAT hike, financial transactions tax
- Lagarde: No-one is immune
- HK and Shanghai stocks fall by 0.3% after long week holiday; Nikkei -0.6%, Kospi -1.25%
- Gold $1733/oz; Oil $99/bbl
The early interbank open was very quiet with EUR/USD trading near its NY closing level at 1.3220. The EUR was getting a boost from weekend reports that the Greek government and the IIF were close to a new debt-swap deal agreement. Solid selling interest from corporate and real money players kept EUR/USD capped below technical resistance at 1.3245. Reports that the Greek government were furious over suggestions that they may be forced to accept EU budgetary oversight in return for the EUR130 billion bail-out, sent the EUR/USD back under 1.3200 and it’s stayed there for much of the session. Trailing stops from interbank players are seen below 1.3160. Ranges: 1.3171/1.3230.
AUD/USD also opened at its NY closing level near 1.0650 but its been sliding slowly lower since then. Firstly the fact that the Chinese government didn’t lower the RRR as expected undermined recent AUD bullishness. The bearish intraday sentiment was added to by reports that the recent Australian bond rally, which has played a big part of the recent AUD rally, may be running out of steam. So called good names were spied booking profits in GBP/AUD. Ranges: 1.0568/1.0652.
Cable hasn’t fallen as much as the EUR/USD, supported by GBP/AUD flows, with cable trading 1.5706/30.
USD/JPY 76.63/77, with Kampo still reported to be on the bid at 76.50.
EUR/CHF 1.2052/66, with large bids still reported at 1.2050.
