AUD smashed on RBA surprise in the absence of liquidity
City Index May 1, 2012 1:00 PM
<p>EUR/USD Range: 1.3234-1.3260 Support: 1.3100 Resistance: 1.3350 The euro continues to sit on the sidelines trading around 1.3250 with a stops seen either side of […]</p>
The euro continues to sit on the sidelines trading around 1.3250 with a stops seen either side of the weeks range thus far. (1.3208-1.3267). With Europe on holiday today I expect the short term fortunes of the single to be led by the cross market with signs the JPY strength is set to test the BOJ’s resolve as Japan celebrates it’s so called Golden Week. China’s manufacturing PMI data came in a touch below consensus at 53.3 from a reading of 53.1 in March with the market now awaiting the US ISM manufacturing index release at 3pm GMT today with the market forecast being 53.
Range: 1.6216 – 1.6240
Sterling trades a little weaker ahead of the release of the UK manufacturing PMI data today at 9.30 which is expected to show a reading of 51.5 from 52.1 the previous month but again I stress the service PMI data released later this week is a far superior gauge for UK growth. For me GBP is looking a little tired with a failure to sustain a 1.6300 handle yesterday and the cross looking fatigued in the low 0.8100’s.
The AUD dropped nearly a cent to 1.0330 following the Australian Central Banks decision to cut interest rates by 50 basis points to 3.75% with most forecasts being for a 25 basis point cut. The AUD cross market was also hit hard with AUD/JPY hitting a four month low of 82.24. The RBA justified the aggressive move by saying inflation would be lower than previously thought over the next 2 years but the market is concerned that such a bold move sends a signal that the RBA are seriously concerned about Chinese growth prospects.
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