AUDUSD: Another negative start to the week for investor risk sentiment as Europe’s debt crisis continues to unease investors sent the Australian dollar sharply lower in Asian trade Monday, dragged by weaker equities.
At 0603 GMT, the Australian dollar was at US$1.0341, down from US$1.0618 late Friday. Against the Japanese yen, it was at Y79.735, down from Y82.28. Bond futures soared, helped by the global volatility.
Locally the currency ignored numbers which showed Australia posted a seasonally adjusted trade surplus of A$1.83 billion in July, compared with a surplus of A$1.82 billion in June.
The US$1.0250/US$1.0300 region remains important support for the Australian dollar. A significant weakening in domestic sentiment data would arguably see that region being tested again
We expect a range for today in AUDUSD rate of 1.0250 to 1.0400 (We expect a good support around 1.0250. We set limit buy order at 1.0265, stop loss at 1.0185, target at 1.0315 to 1.0400)
EURUSD: The point is highlighted by the fund’s oversight over Greece’s debt problems. Better IMF foresight would have allowed it to raise warning flags on what has become a costly and damaging spiral of economic deterioration in the country–and the euro zone.
The fund is expected to implement some of the staff’s recommendations in the coming months, including setting a 60% threshold for debt as a percentage of gross domestic product as a trigger for more intense fund surveillance. The IMF will also take a more risk-based approach when assessing a country’s balance sheets.
Prior to the 2008 global economic crisis, government spending by rich countries was fueled by a reliance on strong growth. The financial meltdown and subsequent recession brought the debt levels into sharp focus as markets began questioning the ability of governments to pay off their huge debts. Those debt-overhangs only grew larger as advanced economies added to their burdens with massive stimulus programs. As growth projections have been repeatedly revised downward in recent months, tackling looming debt levels is increasingly urgent. Example: GREECE.
We expect a range for today in EURUSD rate of 1.3560 to 1.3730 (We are expecting another sell off from high 1.3730 and a good recovery from low 1.3515. We avoid trading the market for now.)
USDJPY: U.S. President Barack Obama said Monday the world economy would remain weak until the eurozone crisis was solved, as market anxiety mounted over debt woes in Greece, Spain and Italy.
U.S. President Barack Obama said Monday he would agree to sign into law pieces of his $447 billion jobs plan–but pressed them to pass the measure in full.
Republicans have said they welcome some ideas in Obama’s bid to cut down on 9.1% unemployment unveiled last week, but have said they might extract some ideas and pass them in stand-alone legislation.
We expect a range for today in USDJPY rate of 76.70 to 77.30 (Set limit BUY order at 76.60, stop loss at 76.00, target at 77.15 to 77.50)
