- Latest Australian CPI +0.9% QoQ putting possible rate hikes back on the table
- AUD/USD surges to new multi-decade highs at 1.1060
- Asian central banks like Korea and Singapore intervene to halt USD fall
- Gold makes new record highs above $1625/oz
- USD/CNY fixed at new record low 6.4426
- New Zealand business outlook improves to 47.6 in July
- Latest reworking of US debt-ceiling plan unlikely to be voted on before Thursday
- S&P says any talk of US downgrade is premature as depends on plan
- Regional equity markets fall by around 0.25% on average
We had a very quiet morning with nobody interested in doing anything but the higher than expected CPI saw the market spring into action.
AUD/USD spent the morning trading around 1.0950 but jumped immediately on the higher than expected CPI. Rate cuts won’t be happening in Australia if inflation shows signs of increasing. Option-related stops were triggered above 1.1010 as players sought increased cover on the break above multi decade highs. Ranges: 1.0940/1.1061
NZD/USD rallied initially alongside the AUD, posting a new record high at .8761 before falling back on AUD/NZD buying.
USD/JPY traded to a low of 77.75 but large option protection at that level remains intact. Range 77.75/78.02.
EUR/USD played second fiddle today; rallying early but falling back to opening levels on EUR/AUD and EUR/JPY selling. Ranges: 1.4490/1.4536
Cable 1.6407/39, USD/CHF .8003/29, EUR/CHF 1.1612/46, EUR/GBP .8821/44
