AUDUSD: The Australian dollar was slightly higher late Tuesday but lacking any real direction as traders braced for more uncertainty in European trading, with many fearing Greece is lurching closer to default on its debt repayments.
The lack of direction also reflected a mixed session for Asian share markets following modest gains by Wall Street on Monday. A report that China may support Italy by purchasing its debt was also lending support to currencies such as the euro.
We expect a range for today in AUDUSD rate of 1.0260 to 1.0370 (The pair drop low at 1.0258, we set limit BUY order at 1.0265, with target at 1.0315 to 1.0400. The price trading at 1.0340 ranges, those who wish to target further, trail stop loss to 1.0285. We prefer to close the trade.)
EURUSD: The European debt crisis spreads and worsens. The G-7 met last weekend and did nothing useful. The European Central Bank’s chief economist, who was the German representative on the ECB, resigned last week to protest the bank’s purchases of Italian and Spanish debt.
The Europeans keep throwing money at problems and insisting on short-term palliatives. They are too willing to spare the bankers for past mistakes by trying to shift the cost of bad debt to unwilling taxpayers. Many propose a “European bond” to hide the fact that they want to shift the excessive debt contracted by the spenders to the more fiscally prudent. The current ECB acts on the belief that all problems can be solved by bailouts.
We expect a range for today in EURUSD rate of 1.3475 to 1.3760 (The European still uncertainty, we prefer to stay out of the market. Although we expect the pair likely to reach above 1.3700 before it head down toward 1.3470.)
USDJPY: Congress’ focus this fall on reducing the federal budget deficit may postpone the annual scramble to renew tax breaks for companies’ research and development costs, some U.S. banks’ overseas business and upgrades to restaurants and retail stores, among other provisions that expire at the end of the year.
With Washington lobbyists’ and lawmakers’ sights locked on the bipartisan Congressional panel tasked with reducing the deficit, passing a laundry list of expiring–and sometimes expensive–tax provisions may be a tough sell before the end of 2011.
Last week President Barack Obama asked the bipartisan committee to come up with further deficit reductions to pay for his $447 billion jobs plan, which would expand a payroll tax break scheduled to end this year.
We expect a range for today in USDJPY rate of 76.60 to 77.20 (We set limit BUY order between 76.40-60 ranges, stop loss at 75.80, target at 77.20-60)
