AUDUSD: A sharp rise in inflation expectations in Australia in April could erode the case for lower interest rates in coming months.
Australians now expect inflation to rise 3.3% over the next year, a rate well above the Reserve Bank of Australia’s comfort zone. Recently, inflation has been tracking comfortably within the RBA’s desired band of 2%-3%.
The RBA last week opened the door to further cuts in interest rates, but added that inflation must remain contained before it can do so. Its cash rate is at 4.25%.
First quarter inflation data, due out later this month, is expected to confirm inflation is still under control, allowing interest rates to be cut in May.
We expect a range for today in AUDUSD rate of 1.0320 to 1.0410 (Yesterday we bought the pair at 1.0270, the pair meet both target below at 1.0320 and 1.0370)
We enter AUDUSD at 1.0270 (meet our target at 1.0320 and 1.0370)
EURUSD: Egypt is seeking a $3.2 billion loan after rejecting a proposed program by the IMF last year. Economists warn time is running out for the embattled country. Central-bank reserves are dwindling and external financing is needed to avoid a disorderly devaluation of the Egyptian pound that would do major damage to the country’s financial system and public accounts.
Egypt still needs to win broader political support for its economic program before the International Monetary Fund board will consider granting the struggling economy a $3 billion loan
The IMF mission will remain in close contact with the authorities in the coming weeks as they finalize remaining details of their economic program, including the 2012/13 budget, and mobilize the required political support for this program
We expect a range for today in EURUSDUSD rate of 1.03100 to 1.3200)
We bought EURUSD at 1.3080 (continue to hold – reached first target at 1.3130)
Stop loss at 1.3080 ( bring stop loss from 1.0320)
Target at 1.3130 to 1.3180
USDJPY: The U.S. and other governments are likely underestimating the life expectancy of their aging populations, a risk that could boost pension liabilities by nearly 10% and balloon already massive public debt levels, the International Monetary Fund warned Wednesday.
The IMF said many governments should act now to raise mandatory retirement levels and encourage pension plans to better hedge their risk.
We expect a range for today in USDJPY rate of 80.50 to 81.20
We set limit BUY order for USDJPY at 80.30
Stop loss at 79.60
Target at 80.80 and 81.30
