AUDUSD: The Australian dollar edged slightly higher Tuesday on the back of strong stocks across the world, though concerns grew about the state of the local economy. Weighing on sentiment locally, in minutes from its early August policy meeting, the Reserve Bank of Australia said global instability underpinned its decision to keep interest rates on hold at 4.75%, adding that sustained market volatility will hit confidence and could ease inflation concerns.
While the developments would typically weigh on the Australian dollar, the currency was boosted by improving risk sentiment that had stocks across Asia slightly higher following a more than 200-point gain in the Dow Jones Industrial Average.
A leading index of the Australian economy released Wednesday grew at an annualized rate of 1.6% in June, compared with growth of 1.8% in May. A coincident index, which is a broad measure of current economic activity, grew at an annualized rate of 0.1% in June, compared with a contraction of 0.2% in May. The report is further evidence of a slowdown in the economy over recent months, adding pressure on the Reserve Bank of Australia to hold off raising interest rates.
We expect a range for today in AUDUSD rate of 1.0400 to 1.0500 (Yesterday we successfully shorted the pair at 1.0480 ranges, with target 1.0415, and closed the trade. Even though the pair recovery but our view is still negative, we expect the pair heading further south toward 1.0400 and possible 1.0370)
EURUSD: The euro fell Tuesday after French and German leaders concluded a much-anticipated meeting without throwing their support behind the creation of euro-zone bonds, which some traders view as key to sorting out the region’s troubled finances.
Germany and France, the euro-zone’s two biggest economies, are expected to lead efforts to contain any damage caused by debt in Italy, Spain and other countries. However, the lack of a concrete proposal from Tuesday’s meeting, plus data showing German economic growth slowing, dismayed traders. Germany’s gross domestic product rose only 0.1% from the previous quarter, and by 2.7% in annual terms.
We expect a range for today in EURUSD rate of 1.4300 to 1.4400 (Our view remain the same, we expect the pair to head further south toward 1.4300 region and 1.4280. Yesterday we set to short the pair at 1.4480, the pair reach high 1.4469, we missed the trade.)
USDJPY: U.S. industrial production rose slightly in July as auto makers recovered from natural disasters earlier this year in Japan. Production climbed 0.9%, the Federal Reserve said Tuesday. The report also said industries used 77.5% of their capacity, compared with a revised 76.9% in June.
July factory production rose 0.6%, led by a rebound for auto production as the effects of the Japan earthquake earlier in the year ebbed. The March quake and subsequent tsunami caused supply chain disruptions across the auto sector. The recession ended about two years ago, and manufacturing helped lead the recovery. Year over year, manufacturing production was up 3.8% from July 2010.
We expect a range for today in USDJPY rate of 76.20 to 77.20 (We set to buy at 76.20, stop loss at 75.60, target at 76.80 and 77.20)
