AUDUSD:Â The Australian dollar pushed towards its highest levels of the week Friday as an upbeat U.S. jobs report from payroll giant ADP lifted riskier currencies.
The Australian dollar was further helped by news the European Central Bank will waive minimum ratings requirements to accept Portuguese debt as collateral. These developments, however, were equally detrimental to both ends of the Australian bond curve.
As the U.S. dollar pushed lower in Asian trade, the central banks of South Korea and the Philippines were both seen entering the foreign exchange market. Still, that buying did little to keep the Australian dollar from gaining as the ADP report has caused expectations to improve ahead of Friday’s key nonfarm payrolls report for the U.S.
Besides the global trends, bond traders remained focused on the statement early in the week from Australia’s central bank, which had economists continuing to downgrade their views on the economy and the prospect for rate rises.
We expect a range for today in AUDUSD rate of 1.0680 TO 1.10760 (If set to BUY on at 1.0670, stop loss at 1.0620, target at 1.0720-60, or we set to Short at 1.0780, stop loss at 1.0840, target at 1.0720 and 1.0680)
EURUSD: Europe needs stronger growth to balance its financial sector. Europe’s growth agenda for the past 10 years has failed. Some of the region’s problems stem from a market that is fragmented along national lines, which hasn’t so far fulfilled European Union ambitions for the creation of a single economic area.
Once the Greek government has managed to stabilize its finances and a credible recovery plan is under way, the European Union should set up a plan to help the troubled country service its massive debt.
With high interest rates the troubled country must pay to get financing, the debt service may become a pressing issue as soon as emergency funding talks between Athens and other Europeans to avert default on the EUR124 billion of bonds maturing between now and 2014 are over. Â Europeans have already imposed strict conditions on Greece in order to release the latest disbursement of Greece’s existing loan, or decide on a further aid package. Bending to pressure, the Parliament in Athens approved on July 1 a crucial five-year, EUR28.4 billion austerity plan.
We expect a range for today in EURUSD rate of 1.4110 to 1.4260 (As mentioned last week that the pair has a resistant at 1.4360 and possible heading toward 1.4180 and 141.20. We set to BUY EURUSD at 1.4110, stop loss at 1.4050, target at 1.4170 to 1.4220.)
USDJPY:Â U.S. Treasury Secretary Timothy Geithner said Sunday the U.S. is not going to default on its debt obligations despite the apparent hardening of the impasse between Democrats and Republicans on a budget compromise.
If lawmakers and the Obama administration don’t agree on a compromise budget package that includes raising the $14.29 trillion borrowing limit before Aug. 2, Treasury says the government could begin defaulting on its obligations.
The G-20 industrialized and developing nations are having “very informal” discussions about a series of matters including the relationship between the Federal Reserve’s benchmark rates and emerging markets’ currencies.
We expect a range for today in USDJPY rate of 80.20 to 80.80 (We mentioned last week that the pair possible heading toward 81.50. We must carefully watch whether the pair sent another wave down toward 80.00 levels. We set to BUY the pair at 80.20, stop loss at 79.50, target at 80.70 to 81.20)
