AUDUSD: The Australian dollar gained steadily late in Asian trading, recovering from an earlier sell-off after Chinese inflation data came in higher than expected.
China’s consumer price index for January rose 4.5% from a year earlier, faster than the 4.1% rise in December and the 4.1% increase economists were expecting. The rise had Australian dollar buyers worried that higher inflation could keep China’s leaders from administering steps such as easing monetary policy to boost the local economy, which is Australia’s largest trading partner.
The International Monetary Fund and Greece’s European creditors should show flexibility in negotiations for a new bailout package for Athens to “turn the page” on the country’s worsening debt crisis
We expect a range for today in AUDUSD rate of 1.0730 to 1.0825 (Expect the pair to head South next week)
We Shorted AUDUSD at 1.0785 (continued to hold our trade)
Stop loss at 1.0840
Target at 1.0725 and 1.0685
EURUSD: If Europe increases the firepower of its emergency funds, it could assure markets on the ability of the euro zone to tame its crisis and make it unlikely Italy needs external financing.
While some in Europe, particularly Germany, are pressing for tougher austerity in Greece, the IMF has drawn the line on the ability of Greece to receive IMF funds. If Athens’s debt doesn’t fall to around 120% of gross domestic product by 2020, and if the bailout program isn’t completely financed, the IMF won’t contribute to an expanded loan package for Greece. Athens needs the money to pay upcoming bills and avoid default.
We expect a range for today in EURUSD rate of 1.3080 to 1.3180
We Shorted EURUSD at 1.3270 ranges
Stop loss at 1.3330
Target at 1.3170 and 1.3130
USDJPY: New borrowing at the Federal Reserve’s central bank dollar liquidity facility total $14.670 billion in the week ended on Wednesday. Total borrowing at the facility stood at $108.757 billion, according to data released by the Federal Reserve Bank of New York on Thursday. Total borrowing last week stood at $104.454 billion.
The dollar swap liquidity facility was reintroduced in 2010 to ensure the global financial system would not run short of dollars. While some critics have called the effort a stealth bailout of Europe as the region navigates a debt crisis that could lead to the end of the euro, Fed officials say the program protects the U.S. banking system and is in America’s best interest.
We expect a range for today in USDJPY rate of 77.30 to 77.90
WE AVOID TRADING TODAY
