AUDUSD: The Australian dollar inched higher Tuesday as renewed buying interest in Asian trading somewhat offset dovish minutes from Australia’s central bank.
Australian bonds slid on the Reserve Bank of Australia minutes from its July policy meeting, which suggested further rate hikes could be some way off.
Also in the minutes, the RBA said growth for 2011 likely won’t hit its previous target, with recent data indicating there is more time to assess inflation risks and it would be “prudent to use that time.”
The currency was further clipped as China’s Dagong rating agency said the Australian dollar can’t be considered a safe-haven asset. Still, neither development was enough to clip the Australian dollar too much, with a round of buying early in Asian trade helping absorb the news.
We expect a range for today in AUDUSD rate of 1.0700 to 1.0770 (We set to short the pair at 1.0770, stop loss at 1.0840, target at 1.0700 to 1.0650)
EURUSD: A lift in risk sentiment fueled gains for the euro and other growth-sensitive currencies on Tuesday, though the common currency remained vulnerable to developments in the euro-zone debt crisis.
Investors took on a more optimistic tone about a Greek financing deal being reached at Thursday’s emergency summit of euro-zone leaders, where they will discuss the region’s financial stability and various financing options for debt-laden Greece.
Reports that Swiss banks are planning to transfer up to EUR10 billion to German tax authorities as part of a deal worked out between the Swiss and German governments to address German tax evasion through Swiss bank accounts gave the euro support. A decent Spanish bond auction and a bounce in equity markets also underpinned the currency, analysts said.
We expect a range for today in EURUSD rate of 1.4100 to 1.4240 (We missed another short trade at 1.4220; the pair reach high 1.4214, then knocking off to 1.4110. The pair currently create Elliot wave, which possible heading to 1.4250 and then 1.4300. Although we avoid the trade today)
USDJPY: Japan’s economy is showing signs of recovering from the horrific tsunami and earthquake that shook the nation in March and could expand later this year
The IMF says the economy will likely show a 0.7% contraction in 2011 given the damage in the first half of the year, especially to its manufacturing sector. But growth is seen rebounding next year to 2.9%, the fund said in its annual economic assessment.
IMF said the Japanese yen appears to be “fairly valued” based on market fundamentals. The Group of Seven largest industrialized nations jointly intervened in the yen shortly after the earthquake when the country’s currency strengthening threatened to weigh on its fragile economic state. Since then, the yen has largely traded in a band of 80-84 against the U.S. dollar.
Japan must simultaneously begin addressing its mountainous public debt looming ahead, which is expected to hit 237% of gross domestic product next year. The government has proposed a social security and tax plan that includes a controversial plan to double the consumption tax rate by the middle of the decade.
We expect a range for today in USDJPY rate of 78.80 to 79.60 (We prefer to stay out of the trade today. Look like the pair been sideway between 79.00 to 79.20 range)
