AUDUSD: Australian Treasurer Wayne Swan sounded caution Sunday over Canberra’s plans to return to surplus next year, warning that Europe’s debt fears had delivered a “huge hit” to global confidence.
Swan said there was a mood of “sober realism” among finance ministers at this weekend’s meetings of the G-20 and International Monetary Fund, with a “fair degree of concern” about the state of the global economy.
Australia’s links to fast-growing Asian economies helped it weather the global financial crisis as the only advanced economy to dodge recession, and booming mining exports have shielded it from the worst of the recent turmoil.
We expect a range for today in AUDUSD rate of 0.9750 to 0.9880 (Last week, we prefer to stay of the market. The pair likely to move back toward 1.000 parity, if it can hold on above 0.9800 levels.
EURUSD: The dollar’s rise came at the expense of the euro as the ongoing sovereign-debt issues in the euro zone continue to drive traders away from the common currency. Speculators held a net short position worth $13.6 billion against the euro this week, or 79,460 contracts, up 46% from the previous week.
As investors sought refuge from the euro zone’s woes, they moved away somewhat from the Swiss franc, which has seen its record appreciation stemmed after the Swiss National Bank took measures to keep it from rising. The market’s net long position in the Swiss franc stood at $600 million, or 4,221 contracts, down 23% from the previous week.
We expect a range for today in EURUSD rate of 1.3450 to 1.3560 (We continue to carefully entry the trade at this level. A test support for the pair at 1.3500 levels, it might move back to 1.3630 then 1.3715 and 1.3850. If fail to support at 1.3500, we might see at 1.3370 and possible 1.3000
USDJPY: After a year of bearish wagers against the declining dollar, currency traders are now strongly optimistic on the greenback after switching their viewpoint last week. Speculators held a net $8.5 billion in bets that the dollar will strengthen, as of Sept. 20, data from Commodity Futures Trading Commission’s weekly report on the commitments of traders showed Friday.
The market’s shift last week from a consistently anti-dollar bent to a more positive outlook marks the first time in more than a year that investors had held the dollar net long against the major currencies the CFTC tallies. This week’s dollar position is the largest long investors have held since June 29, 2010.
The yen also benefited from safe-haven flows in this week’s market turmoil. Traders held a net $7.4 billion in wagers that the yen will rise, despite the Japanese government’s pronouncements that it will work to weaken the currency. That position represented 45,617 contracts, up 32% from last week.
We expect a range for today in USDJPY rate of 76.50 to 77.00 (Last week we bought the trade at 76.30 and it reach our target at 76.80. We expect the pair continuing to head north, within weeks, it might reach 78.00 or possible 80 levels.
