AUDUSD: The Australian dollar pushed sharply lower Tuesday as renewed fears Europe’s debt crisis could spread to Italy and Spain heightened risk aversion.
Australian bonds were helped by the concerns, with bonds at both ends of the curve rallying.
New International Monetary Fund chief Christine Lagarde said it’s too early to discuss “the conditions and terms and lengths and volume” of a second Greek bailout, setting off the decline in risk-sensitive assets, such as the Australian currency and equities across Asia.
On the positive note, that Chinese investment in Western Australia, the largest state in the country, is increasing and expected to continue to grow. 80% of China’s investment in Australia is put into projects in Western Australia, and that 70% of all Australian exports to China are from the state.
We expect a range for today in AUDUSD rate of 1.0530 to 1.0660 (The last few days, the market might has been exhaust sell off, we determine to entry the pair at the current market price 1.0590, stop loss at 1.0510, and target 1.0640-1.0680)
EURUSD: European Investment Bank Chairman Philippe Maystadt said Tuesday the euro zone planned to lessen Greece’s debt mountain by buying back Greek bonds at going rates on the secondary market.
Euro zone finance ministers on Monday agreed to beef up the size and scope of the EFSF, a rescue fund set up in the aftermath of last year’s EUR110 billion Greek bailout which has a current lending capacity of EUR440 billion.
Maystadt also confirmed the probability of a euro zone summit in the coming days to put an end to the debt contagion threatening Italy and Spain.
We expect a range for today in EURUSD rate of 1.3800 to 1.4030 (Due to market speculation on EURO debt, we prefer to stay out of the market today. Although the worst scenario for the pair might be at low 1.3800 levels, that consider a good entry level, with stop loss 50 pips, target upside 1.3950 to 1.4050)
USDJPY: U.S. House Republicans on Tuesday sought to shift the onus back on the White House to make concessions so policy makers can reach a deal to raise the debt ceiling, insisting they would not accept any tax increases as part of an accord.
The comments come the day after Obama, appearing at a press conference at the White House, called on both Republicans and Democrats to make larger concessions on issues important to their respective parties. Seeking to place himself outside the Capitol Hill fray, Obama said policy makers need to think big: “If not now, when?”
We expect a range for today in USDJPY rate of 79.00 to 80.00 (Dollar fall to 78.50, lowest since March 18. We expect the selloff has been exhausted from hedge fund, we continue to expect the pair to head north toward 80.00 and possible 81.00 within week or two.)
