- German ban on short-selling of certain financial instruments caused new waves of risk-aversion overnight and drove Asian stockmarkets lower
- Australian consumer confidence falls in May
- Paul Volcker was prominent on the newswires talking up the EUR
- Regional stockmarkets fall by 1.6%
- Oil falls over 1%, Gold steady
The increasing talk of financial market reform and stricter controls was always going to be an issue for the AUD, with the highly leveraged speculative community sitting on very long positions according to recent IMM reports. AUD/USD opened around .8620 and managed to hold itself above .8600 until the poor consumer confidence data was released. This led to stops below a major chart low at .8575 being triggered. Stops in the EUR/AUD above 1.4250 were also substantial. The AUD/USD fell to a low of .8515 before recovering on the back of a higher EUR/USD. Ranges: .8515/.8636, EUR/AUD 1.4100/1.4280, AUD/JPY 78.00/79.50.
EUR/USD had fallen almost 300 pips in NY but struggled to make new lows amid significant short covering in the crosses, EUR/AUD in particular but EUR/GBP also. The market is still trying to come to grips with the effect of proposed new financial market reform. The EU politicians are showing no interest in trying to talk up the EUR so US officials like Volcker are starting to do it for them. Ranges: 1.2146/1.2224
Cable managed to trigger some stops below the previous 1.4250 low but the follow through was negligible. GBP/AUD buying negated EUR/GBP buying with no net effect on the pound. Traders are worried of the impact that European hedge fund reforms might have on the city of London. Ranges: 1.4240/1.4314, .8515/53
USD/JPY fell in early trade on the heavy AUD/JPY long liquidation but rumours of Kampo bids around 91.50 helped the pair bounce. Ranges: 91.56/92.15, EUR/JPY 111.30/112.58
Markets: Nikkei, HK, Kospi and All Ords fell around 1.6%. Gold $1212/oz. Oil -1.2% at $68.60/bbl.
