Chinese policy buoys AUD and risk

<p>The AUD was supported in what was a dull start to the week in FX markets. Risk and the AUD were the main beneficiaries, with […]</p>

The AUD was supported in what was a dull start to the week in FX markets. Risk and the AUD were the main beneficiaries, with news that China will allow greater private investment in state controlled industries along with the expansion of farmers’ land rights and speculation that China will loosen their one child policy.

Equities and risk are in a sweet spot following Janet Yellen reiterating last week the need for monetary stimulus whilst inflation and growth remain weak making a December taper very unlikely.

CFTC position data for the week ending 12th of November showed USD longs more than doubled to $13 billion with AUD and GBP shorts looking the vehicle of choice and, although this data is now a week old, it will get some focus as the FX markets prepare for year-end market positioning.

The week ahead sees a long list of Fed speeches; including that of Bernanke’s and also some US data – including retail sales, minutes from the previous RBA, FOMC and BOE meetings. Germany also sees a data heavy week with the German ZEW index, manufacturing PMI, GDP and the IFO survey due.

In Asia we have the BOJ meeting and the November economic report.

 

EUR/USD

Supports 1.3470-1.3330-1.3390 | Resistance 1.3545-1.3565-1.3630

 



USD/JPY

Supports 99.60-99.45-99.10  | Resistance 100.45-100.60-101.55

 



GBP/USD

Supports 1.6055-1.5990-1.5945 | Resistance 1.6165-1.6200-1.6260

 

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