AUDUSD: The Australian dollar remained under selling pressure during the week and despite initial support in the parity area, there was fresh selling pressure later in the week with heavy losses to lows near 0.98 against the US currency
The Australian dollar was undermined by a general deterioration in risk appetite as equity markets were subjected to sustained selling pressure. There were also increased fears surrounding the regional growth outlook which put downward pressure on commodity prices.
We expect a range for today in AUDUSD rate of 0.9700 to 0.9980 (The pair might be exhausted of selling off at 0.9700 region)
STAND ASIDE
EURUSD: The euro-zone fears escalated in recent weeks as newly elected politicians failed to form a coalition government in Greece, forcing fresh elections to be scheduled for June. With no government in place, market participants increasingly worry that Greece might be forced to abandon the euro. That has led investors in higher-yielding, so-called risk-sensitive currencies to exit those positions for the relative safety of the dollar.
Fears about Europe’s debt crisis and Greece’s potential exit from the euro zone drove a sweeping dollar rally in recent weeks. Nearly all of the pro-dollar bets were coming against the euro. Net bets the euro would fall against the dollar totaled $27.7 billion as of Tuesday, an 18% jump from a week earlier and just shy of the highest level since at least 2007, when data became reliable, of $28.1 billion, set in January.
We expect a range for today in EURUSD rate of 1.2680 to 1.2800 (We expect the pair to head south when it reach high at 1.2800)
STAND ASIDE
USDJPY: Defensive considerations will remain extremely important in the short-term as markets continue to focus on the Euro-zone crisis and global vulnerabilities. There is likely to be further defensive demand for the US currency as the US Treasury market continues to attract support. The Federal Reserve policies will also be important, especially as there will be further speculation that the Fed will sanction further quantitative easing if there is any fresh deterioration in the economy. The dollar will, therefore, find it difficult to gain further strong support, especially if forthcoming indicators are weaker than expected.
Investors held a total $28.3 billion net long position–or bets the dollar would rise against other major currencies–a 38% jump from a week earlier, according to the Commodity Futures Trading Commission’s weekly report on the commitments of traders. The CFTC’s weekly report shows speculative investors’ positions in seven major currencies held against the dollar.
We expect a range for today in USDJPY rate of 78.50 to 79.50
STAND ASIDE
