More growth measures are necessary to improve Italy’s outlook.
AUDUSD: The International Monetary Fund Tuesday revised lower its forecasts for economic growth in Australia in 2011 and 2012, but warned at the same time that inflation would remain problematic for policy makers.
Australia’s commodity-rich economy is expected to show a 3.3% rise in gross domestic product in 2012, compared with an August forecast of 3.5%, the IMF said in its latest World Economic Outlook.
It expects the economy to grow by 1.8% in 2011, compared with an August forecast of 2.0%. The cut reflects the ongoing hit to activity stemming from widespread floods at the start of the year in Queensland.
Still, the IMF expects inflation to be 3.3% in 2012, compared with a forecast in April of 3.0%. That puts inflation above the Reserve Bank of Australia’s 2% to 3% inflation target band, suggesting little scope for the central bank to cut interest rates over the near term.
We expect a range for today in AUDUSD rate of 1.0120 to 1.0330 (Yesterday, we close our trade at 1.0290 when we bought at 1.0185, booked 105 pips profit. We prefer to stay out the market for now)
Limit BUY order for AUDUSD at 1.0120
Stop loss at 1.0060,
Target at 1.0180, 1.024 and 1.0320.
Alternatively, we set to SHORT at 1.0410,
Stop loss at 1.0460,
Target at 1.0380, 1.0330
EURUSD: European officials suggest the EUR500 billion ($685 billion) bailout fund could also be used to buy sovereign bonds once member countries ratify a July 21 agreement.
The IMF warned in its economic outlook that if European policy makers don’t act fast to contain the sovereign-debt crisis, it could plunge the U.S. and European Union economies into a deep recession.
The IMF warned that if growth in Italy was 1 percentage point below its forecast, the debt-to-output ratio would jump 20% of GDP. That would put Italian debt-to-GDP levels up to 140%, around the same level that Greece’s debt is expected to peak at.
Still, Carlo Cottarelli, head of the IMF’s fiscal affairs department, estimates that Rome’s budget plan can lower the country’s deficit to about 1% of output in 2013.
We expect a range for today in EURUSD rate of 1.3610 to 1.3820.
We set to Short EURUSD at 1.3890
Stop loss at 1.3950
Target at 1.3830, 1.3770 and 1.3730.
Alternatively, We set limit BUY order at 1.3560,
Stop loss at 1.3480
Target at 1.3610, 1.3660 and 1.3690
USDJPY: The U.S. on Tuesday accused China of imposing wrongful trade duties on U.S. chicken and poultry exports, saying the fees cost the struggling U.S. poultry industry nearly $1 billion a year.
China imposed the duties in September 2010 to retaliate against President Barack Obama’s decision the previous year to invoke a rare safeguard against imports of Chinese tires. U.S. poultry exports to China have been slashed by 90% since they went into effect, with a projected cost to the U.S. poultry industry of about $1 billion by year-end, according to USTR.
The U.S. argues that China hasn’t complied with requirements on transparency and due process, failed to properly explain its findings, incorrectly calculated the duties, and hasn’t supported its findings that U.S. imports are hurting China’s poultry industry.
We expect a range for today in USDJPY rate of 76.00 to 76.90 (Yesterday we set to BUY USDJPY at 76.30, the pair went down from 76.90 to 76.34 did not reached our limit BUY order.)
We are now buying at the market price 76.45
Stop loss at 75.80
Target at 76.85, 77.15
