AUDUSD: Economic growth in Australia will pick up this fiscal year, but it will be narrowly based on capital expenditure and will need to overcome misfiring in some of the normal growth engines
In its quarterly Business Outlook, the consultancy forecasts gross domestic product to expand 3.5% in the fiscal year started July 1, almost doubling from the 1.9% it estimates for last fiscal year.
Capital spending including that of the public sector will account for almost all of Australia’s economic growth this fiscal year, with private spending alone accounting for two-thirds driven by mining and resource companies wanting to add capacity.
Families are saving rather than spending, while the stimulus injected during the global financial crisis has largely run its course. Housing construction, which has helped the economy expand in previous recoveries, is only limping forward as high interest rates drown out demand from a growing population
We expect a range for today in AUDUSD rate of 1.0780 to 1.0880 (Last week, we shorted the pair at 1.0840, with stop loss at 1.0920, and target at 1.0780 to 1.0720. We continue to hold our short position)
EURUSD: According to the report, several banks, including the Royal Bank of Scotland (RBS, RBS.LN), DZ Bank and Erste Bank (BEERS.UR) have not yet committed to being participants in the new plan. Some senior bankers have expressed concern that questions remain about the details surrounding the new aid package.
European Central Bank President Jean- Claude Trichet called Friday on Greece to push forward on its agreed-to adjustment program, and said the ECB’s credibility remained “non-negotiable” following the announcement of a new bailout for the country
Meanwhile, net euro long positions fell 25% to $1.6 billion, the smallest position since the week ended Jan 18. Ongoing worries about debt problems in Europe continued to keep euro bets to a minimum.
We expect a range for today in EURUSD rate of 1.4300 to 1.4480 (We continue to avoid trading the pair, but we remain focus whether the pair can push through 1.4550. We set to short the pair at 1.4540, stop loss at 1.4620, target downside at 1.4420 toward 1.4300.)
USDJPY: Overall, the dollar remains out of favor with investors. Among the seven major currency crosses tracked in the CFTC data, the net short dollar position was $22.3 billion, 42% higher than it was a week earlier.
Growing concerns that the U.S. government won’t be able to hammer out a deal to raise the debt ceiling and cut long-term deficits have weighed on the dollar in recent weeks. Congress and the White House have until Aug. 2 before the legal borrowing limit is breached.
Speculative investors increased their bets on the yen as worries about debt problems in the U.S. pushed investors into safe havens, according to weekly data from the Commodity Futures Trading Commission released Friday.
Net yen long positions, or bets that the yen will rise at the expense of the dollar, jumped 51% to $6.7 billion.
We expect a range for today in USDJPY rate of 78.00 to 78.80 (We continue to hold our trade, with stop loss at 77.80, and target upside 79.10 toward 80.00.)
