AUDUSD: The Australian dollar declined slightly Tuesday, hurt in part by a decision from the country’s central bank to lower its key cash rate target.
The move by the Reserve Bank of Australia, or RBA, which lowered its benchmark rate to 4.25% from 4.50% in an afternoon decision, will weigh on yield-hungry investors that have piled into the Australian dollar for the past 18 months. The RBA’s decision also highlights how concerned the nation’s leaders are about potential contagion from Europe’s debt crisis.
We expect a range for today in AUDUSD rate of 1.0200 to 1.0330
Long AUDUSD above 1.0200
Stop loss at 1.0150
Target at 1.0260, 1.0330
EURUSD: Standard & Poor’s on Tuesday placed the long-term credit rating of the European Financial Stability Facility, the region’s bailout fund, on review for a possible downgrade. Yields on the facility’s bonds rose shortly after the announcement. On Monday, S&P put France, Germany and 13 other euro-zone nations on review for credit downgrades.
The market’s expecting an all encompassing plan, including greater participation by the European Central Bank; anything short of expectations will no doubt thrust the Euro-zone debt crises well and truly back into the spotlight after a reprieve of sorts in recent days.
We expect a range for today in EURUSD rate of 1.333 to 1.3470
Long EURUSD above 1.3400
Stop loss at 1.3320
Target at 1.3460, 1.3510
USDJPY: Expatriates in Japan have the highest living expenses compared to their counterparts working elsewhere in Asia, due largely to the Japanese currency’s recent sharp rise. The yen has risen by about 20% against the U.S. dollar in the past 12 months and expatriates who are paid in currencies such as the greenback are feeling the impact
In recent months, investors have flocked to the Japanese currency as a safe haven amid volatile markets stirred by euro-zone debt fears and concerns for the global economy.
We expect a range for today in USDJPY rate of 77.30 to 78.05
We set limit BUY order for USDJPY at 77.30
Stop loss at 76.70
Target at 77.80, 78.20
