Range: 0.9724 – 0.9814
The Aussie continues to mount a fight back against the dollar after a low of 0.9708 yesterday. This fall lower was the first time the pair had breached the 50-day MA since late August. The sentiment in the market is very negative surrounding this pair. The break below 0.9724 suggests that the downtrend from 1.0182 is right back on track. A deeper decline towards 0.9651 could be seen later this week. The one thing that remains on the Aussie’s side is the seeming relentless strength of the precious metal gold.
Range: 1.3359 – 1.3419
The euro was rattled again last night as investor confidence in the eurozone continues to diminish. The view is that the recent Irish bailout will do little to help a euro crisis, with Portugal and Spain ready to fall like dominos. Germany’s Chancellor Angela Merkel maintained her view that there is no substitute for austerity, suggesting that Germany’s patience with the rest of the eurozone is wearing thin. Yesterday’s eurozone PMI data was all better-than-expected, but was of course overlooked with a focus on eurozone debt.
Range: 1.5780 – 1.5832
A relatively quiet session thus far on Wednesday has seen the pound stage a small bounce back against the greenback after forming a low of 1.5758 yesterday. GBP/USD has risen around 70 pips since the start of trading, with a high of 1.5832. The pound has performed well against the euro, however against the dollar and yen, has underperformed. With heavy exposure to Ireland, the UK is leveraging the weight already set by its own austerity measures. Not until these broader concerns ease, will the pound be able to get back onto the front foot.