AUDUSD: The Australian dollar surged to a two-week high Thursday, supported by a coordinated central-bank effort to help financial markets, though traders pared some of its gains in late Asia action. While the currency rallied, bond prices fell on both ends of the curve.
Spurring a third straight day of gains for the Australian dollar, which is now up roughly 5% this week against the U.S. unit, major central banks stepped in to shore up the global financial system by cutting the price of emergency funding by 50 basis points. In addition, China cut banks’ reserve-ratio requirements by 50 basis points, its first such easing in three years.
Even as a report showing manufacturing activity in China declined in November weighed on the Australian dollar, the push-back off of earlier highs did little to stem a robust 24 hours for the currency.
We expect a range for today in AUDUSD rate of 1.0130 to 1.0330 (Once again, we shorted at 1.0250 ranges yesterday, the pair fell low to 1.0140 before crawl back to 1.0225)
We re-short AUDUSD again at 1.0220 ranges
Stop loss at 1.0280
Target at 1.0180, 1.0130
EURUSD: Germany wants next week’s European Union summit to agree to automatically sanction countries that violate euro-zone stability rules.
But there is no European unanimity on toughening sanctions or modifying EU treaties, while Germany is opposed to the European Central Bank becoming a lender of last resort to deal with the euro zone’s raging debt crisis.
On the other hand, central bank official warned Thursday it will take a long time to sort out Europe’s debt problems, and told financial markets not to place unreasonable expectations on the European Central Bank’s ability to mitigate the crisis.
We expect a range for today in EURUSD rate of 1.3410 to 1.3560
We set our short position at 1.3560
Stop loss at 1.3630
Target at 1.3510, 1.3460
USDJPY: The U.S. Federal Reserve’s balance sheet shrank a little over the last week as the central bank rejiggers its portfolio in a move to stimulate the economy. The Fed’s asset holdings in the week ended Nov. 30 stood at $2.817 trillion, down from the $2.825 trillion reported a week earlier, the central bank said in a report released Thursday.
Holdings of U.S. Treasury securities rose to $1.672 trillion from $1.665 trillion the week before, while central bank’s holdings of mortgage-backed securities fell to $827.05 billion from $841.60 billion.
The Fed’s portfolio has more than doubled since the financial crisis of 2008 and 2009 as the central bank bought mortgage and government bonds to keep interest rates very low and stimulate the economy.
We expect a range for today in USDJPY rate of 77.60 to 78.20 (We bought the pair at 77.45)
Bought USDJPY at 77.45 (continued to hold)
Stop loss at 76.70
Target at 77.80, 78.20
