All eyes will be on the BoE and ECB meetings today as the Greece saga continues to drag on
City Index February 9, 2012 1:00 PM
<p>AUD/USD Range: 1.5791-1.5850 Support: 1.0700 Resistance: 1.0850 The Australian dollar rebounded back above the 1.0800 level after an initial move lower on the release of […]</p>
The Australian dollar rebounded back above the 1.0800 level after an initial move lower on the release of the Chinese CPI data. Chinese CPI data was the key release in Asia overnight and surprised the markets with an above consensus reading of 4.5% (4% expected). The AUD ran stops to 1.0740 but as the market realised the high reading was driven by food prices due to the Chinese New year AUD rebounded back above 1.0800 but didn’t have the legs to take out the 1.0850 resistance.
Today we see the release of UK industrial production data but the main event will be the MPC meeting at noon today, with the market speculating about further QE. The consensus is for a further £50 billion to be added, with some economists expecting £75 billion. Cable stalled ahead of the 200-day moving average at 1.5930-1.5935 yesterday but the Queen’s currency still looks in good shape whilst above 1.5750 but with barrier protection at the psychological 1.6000 level it seem further stimulus will only provide the market with an opportunity to buy the dip.
The Greek soap opera continued all night as talks between Greek political leaders and Troika officials failed to produce an agreement on a new bailout deal, with pension cuts sighted as the sticking point for now as we head into another day of ‘soon‘ and ‘maybe’. Aside from the Greek headlines today the ECB press conference will be closely watched for any mention from President Mario Draghi on the Greek debt swap deal and if it’s not mentioned in the statement, he’s likely to ask the question post the statement.
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