AUDUSD: Better demand for safe-haven currencies such as the yen and U.S. dollar hurt the Australian dollar in Asia trade Monday but analysts noted the local unit held up relatively well despite accelerating Chinese inflation, worries over Europe’s and America’s fiscal positions and Australia’s introduction of a carbon tax.
Much weaker-than-anticipated U.S. jobs set the tone while inflation figures for China released on Saturday prompted worries more rate increases could be imminent, which would hurt demand for commodities and weigh on the Australian dollar.
China economic data due on Wednesday is the highlight of the week ahead, with industrial production, retail sales and fixed asset investment all to be released as is second-quarter gross domestic product.
We expect a range for today in AUDUSD rate of 1.0600 to 1.07100 (Yesterday, we set to buy the pair at 1.0670, our stop loss at 1.0620; we continued to hold our trade. We expect the pair have a great support at 1.0600 regions)
EURUSD: Worries about forthcoming bank stress tests and doubts about the cohesiveness of Italian fiscal tightening measures were putting Italy in the spotlight.
The euro zone’s problems are getting bigger and the region can’t afford to absorb a full-blown Italian bond-market crisis. Italian bonds have been tumbling in recent sessions on concerns over the health of the country’s banking system. Investors may have been selling Italy to hedge their exposure to other euro-zone countries.
Spanish and Italian bonds sank Monday, pushing up the yield spreads of these countries over German debt on growing fears that Italy and Spain could be drawn into the euro-zone debt crisis.
We expect a range for today in EURUSD rate of 1.3940 to 1.4080 (Yesterday we got hit by stop loss. We would prefer to stay out of the market short term due to speculation)
USDJPY: President Barack Obama and congressional leaders met for about 75 minutes Sunday evening without reaching a deal to cut the deficit and lift the nation’s borrowing limit, raising the prospects that talks will continue to drag towards the Aug. 2 deadline of a potential U.S. credit default.
The two sides will meet again Monday, and Republicans are expected to lay out their framework for a deficit-reduction deal, according to a Democratic aide familiar with the discussion. The meeting in the White House Cabinet Room began with Mr. Obama emphasizing that he believes the group should still strive for a big deal on deficit reduction.
Last week, the prospect of a grand bargain that included slashing $4 trillion from the deficit seemed possible.
We expect a range for today in USDJPY rate of 80.00 to 80.70 (Yesterday we set limit buy order for USDJPY at 80.20, with stop loss at 79.50, target at 80.70, we continue to hold our trade)
