Antipodeans lead the risk currency market lower
City Index September 5, 2012 1:48 PM
<p>Asian markets have seen a renewed downside attempt on both the AUD and NZD following an article in the Sydney Morning Herald suggesting the RBA […]</p>
Asian markets have seen a renewed downside attempt on both the AUD and NZD following an article in the Sydney Morning Herald suggesting the RBA has concerns around commodity prices, the AUD strength and that a rate cut is imminent (as early as next month). Added to this was the Australian GDP data which came in weaker at 0.6% versus the expected 0.7% and the Chinese HSBC services PMI that dropped to a one-year low of 52 in August versus 53.1 in July.
EUR/USD continues to underperform despite the positive European news and the rally in Spanish and Italian bonds. Having failed to break above 1.2637 the single currency took out stops below 1.2540 to make a low of 1.2518. The market is getting worried that Draghi may disappoint at the ECB meeting tomorrow with more delays and a lack of detail that is desperately needed to stop the can being kicked further along the street.
The focus today will be on the eurozone services PMIs and retail sales with the market looking for a reading of 47.5 and -0.2% respectively. The Spanish PM Rajoy will meet Angela Merkel in Berlin today whilst this afternoon the Bank of Canada will announce its interest rate decision at 2pm and across the pond we get second tier data in the form Q2 nonfarm productivity and unit labour costs.
Support - 1.2515-1.2485-1.2430 | Resistance - 1.2580-1.2600-1.2635
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