RBA surprises as Greece continues to drag its feet
City Index February 7, 2012 1:00 PM
<p>EUR/USD Range: 1.3089-1.3138 Support: 1.3000 Resistance: 1.3235 The euro continues to trade within the 1.3026-1.3235 range that has held since late January as the Greeks […]</p>
The euro continues to trade within the 1.3026-1.3235 range that has held since late January as the Greeks continue to drag their feet. Greek political leaders are scheduled to meet later today after postponing their meeting on Monday as they try to decide whether to accept a new Troika led bailout. German Chancellor Angela Merkel seems to be running out of patience with Athens as she said ‘time is running out for Greece to accept the bailout conditions. I don’t quite understand why we need a few more days.‘ France’s Nicholas Sarkozy tried to smooth this over however, when he said, ‘Allowing Greece to go bankrupt isn’t an option.’
Range: 1.0701 – 1.0812
The Australian central bank left rates on hold at its first policy meeting of 2012, defying market expectations for a further 25-basis-point cut and boosting the Australian dollar to a six-month high against the US dollar above 1.0800. The RBA however did remain dovish in its statement, leaving the door firmly open for further rate cuts. The RBA says that if demand weakens, inflation would provide room for a rate cut. It also noted that European risks are still skewed to the downside.
USD/JPY traded with a slightly better tone overnight, led by AUD/JPY as Japanese retail investors bought the pair looking for the advantage of a decent yield return. Elsewhere, Japan’s MoF released details of its daily FX JPY selling interventions for the period October-December 2011 this morning. Following the massive ¥ 8 trillion JPY selling intervention on October 31 2011, the MoF intervened for the four further consecutive days to the tune of ¥ 0.2-3 trillion daily. Intervention amounts as follows: October 31, 2011 ¥ 8,072.2 billion November 1, 2011 ¥ 282.6 billion November 2, 2011 ¥ 227.9 billion November 3, 2011 ¥ 202.8 billion