AUDUSD: Australia’s central bank cut interest rates 25 basis points Tuesday to buttress the country’s A$1.4 trillion economy against growing signs of deterioration in the global growth outlook. The cut, which was widely expected by economists, lowers the cash rate to 3.50%, a level last seen in late 2009, and comes as economists expect inflation to remain weak for some time.
It is the second cut in as many months as the Reserve Bank of Australia signals its deepening fear about the world as Greece heads toward a pivotal election, China’s economy slows and the U.S. job market misfires. Since cutting interest rates 50 basis points May 1 in response to a slowdown in domestic growth, the RBA has warned of further slowing in China, the country’s largest trading partner, and has grown concerned about stubbornly weak consumer confidence.
We expect a range for today in AUDUSD rate of 0.9700 to 0.9780 (We bought AUDUSD at 97.20 and close out at 0.9770 before it knocking back toward 0.9700 ranges)
STAND ASIDE
EURUSD: Cyprus acknowledged Tuesday that there is a “serious possibility” it may become the fourth euro-zone country to seek financial aid under Europe’s temporary bailout fund in order to protect its banking system which is heavily exposed to Greece’s widening financial crisis.
The fallout from the Athens crisis already has forced Cyprus’s second-biggest bank to seek government support for a planned multibillion euro recapitalization, something that will push the island’s public finances deep into the red and cause it to miss this year’s budget targets
We expect a range for today in EURUSD rate of 1.2400 TO 1.2500
STAND ASIDE
USDJPY: Last Friday, the government’s nonfarm payrolls report showed the economy added only 69,000 jobs last month, the smallest increase in a year. Though the weaker-than-expected report ignited some expectations that the Fed might be prompted to take new actions to support the economic recovery.
The housing market’s slow recovery also has implications for monetary policy, Bullard said. Many U.S. households were left saddled with more debt than they had intended and it will take a long time for that debt to recede to healthier levels, Bullard said. This has made it hard for some households to borrow more and means they may not be able to benefit from the low interest rates the Fed has helped generate.
We expect a range for today in USDJPY rate of 78.10 to 78.60 (We bought USDJPY at 78.30 ranges and closed out at 78.80
STAND ASIDE
