AUDUSD: The Australian dollar continued to probe its lowest levels since mid-July on Thursday, weighed by concerns the global economy is headed for a slowdown, while local data remains weak.
Moves by Japan’s Ministry of Finance to weaken the yen also weighed on the Aussie as the U.S. dollar strengthened across the region. It was the third time in less than a year Japanese authorities have attempted to protect the country’s exporters by pushing the yen lower.
Australia’s biggest companies are expected to report weakened profits in coming weeks, highlighting the rift between the booming mining sector and many other areas crunched by the elevated Australian dollar like retailing and manufacturing.
The RBA will announce revised forecasts for economic growth and inflation Friday. Growth is expected to be sharply lower, reflecting a slow start to the year while inflation is expected to be revised higher.
We expect a range for today in AUDUSD rate of 1.0400 to 1.0580 (As mentioned yesterday, that the pair likely to hit south toward 1.0500 areas. We entry LONG at the current market price 1.0430 ranges, stop loss at 1.0370, target at 1.0480, 1.0530, 1.0580 toward 1.0630)
EURUSD: Leadership turmoil at the IMF comes amid growing problems in the world economy. Economists fear the U.S. is entering into another recession, the European sovereign debt crisis is threatening to engulf two of Europe’s largest economies, Japan is intervening in its currency and some of the biggest emerging markets that have been driving global growth are near to over-heating.
The move provided little solace to market participants, triggering immediate selling across global markets. General fear the economic dilemmas that the peripheral countries has faced will spread to the heart of Euro-zone, namely Italy and Spain, which are now the focal point of the Euro-zone debt crises. This was exacerbated by the ECB which signaled intent to provide relief for peripheral economies while neglecting the heart of the Euro-zone.
We expect a range for today in EURUSD rate of 1.0420 to 1.4150 (We set limit BUY order for EURUSD at 1.4020, stop loss at 1.3950, target at 1.4080, 1.4150 and 1.4200. Yesterday, we missed out a short trade where we set price of action at 1.4420. If you wish to take a risk entry at the current market price 1.4060, make sure stop loss and target remain the same)
USDJPY: The yen took center stage during European trading hours Thursday as Japanese authorities continued their effort to weaken the currency and bought dollars, pushing the greenback higher across the board.
The Bank of Japan is so far estimated to have spent between $20 billion and $30 billion on behalf of the Ministry of Finance to curb yen appreciation, pushing the dollar above Y80 against the yen for the first time since July 12 and lifting the euro above Y114.
But Japanese exporters’ reported demand for yen at these levels as well as options-related interest meant the dollar struggled to move higher, and eased back.
The greenback was stronger against growth-sensitive currencies–including the euro and Australian dollar–as traders pulled out of riskier bets and moved into the safe-haven buck, as economic growth worries sent European shares tumbling.
We expect a range for today in USDJPY rate of 78.80 to 80.00 (As mentioned a few days back that we strongly view that the pair likely to hit 79.00 and 80.00, although the pair was tumble low toward 77.00 ranges.)
