AUDUSD: The Australian dollar was little changed late Thursday but under pressure as global markets continue to be gripped by fears that Europe is heading toward a full scale crisis, with pivotal elections in Greece scheduled for Sunday.
Overnight, Moody’s Investors Service slashed its rating on Spain by three notches to Baa3 – just above junk, triggering weakness in currencies like the Australian dollar through the Asia session.
The Spanish news offset a report late Wednesday that Germany’s Bundesbank is “seriously” considering investing its foreign currency reserves in Australia. It would be the latest of a long line of central banks to rush the AAA-rated Australian government bond market.
We expect a range for today in AUDUSD rate of 1.000 to 1.0120
We set limit SELL for AUDUSD at 1.0120
Stop loss at 1.0160
Target at 1.0010 and 0.9960
EURUSD: Germany has “no choice” but to lead Europe out of its debt crisis, lending its clout in support of struggling countries’ crucial reforms
The ECB has come under mounting pressure in recent weeks to take further action to help end the crisis, particularly from Spain, where government bond yields have risen to record levels. Policy makers and analysts from across Europe and the U.S. have also urged the central bank to relax its inflation-fighting focus and carry out further crisis-fighting measures, including cutting interest rates below 1% and buying more government bonds.
We expect a range for today in EURUSD rate of 1.2580 to 1.2660
We set limit SELL for EURUSD at 1.2655
Stop loss at 1.2710
Target at 1.2570 and 1.2510
USDJPY: Outflows from funds dedicated to emerging-markets bonds and equities continued for another week, but at a slower pace, according to EPFR Global’s latest weekly data as of Wednesday.
Net capital flows out of bond funds totaled $361.46 million, down from $597.07 million the previous week, according to a Barclays analysis of EPFR data.
Hard-currency funds saw inflows of $259.26 million, recovering well from the $363.4 million in outflows in the week prior. However, local currency funds continued to see outflows, which were lower at $110.3 million, down from $134 million in the previous week.
We expect a range for today in USDJPY rate of 79.00 to 79.80
We set limit BUY for USDJPY at 79.10
Stop loss at 78.60
Target at 79.60 and 79.80
