As expected, Australia’s PM Gillard has beaten former PM Rudd in a battle for Labor party leadership. The official count is 73 for Gillard and 31 for Rudd. The PM will now turn her attention to increasing her public support ahead of next year’s election. Current polls paint a fairly grim picture for the PM, with Liberal party head Abbot looking like the preferred prime minister.
The political wrangling in Canberra created some volatility in the aussie, especially as members entered the caucus room to hear speeches from both contenders. AUD/USD did manage to climb to a high around 1.0718, before sinking below 1.0700 as the result drew nearer. At the time of writing, the current low for AUD/USD is around 1.0665 and EUR/AUD is hovering around 1.2600.
Over the weekend, the G20 meeting failed to produce any significant results regarding boosting IMF resources aimed at proving extra firepower for Europe if needed. Many non-European officials are calling for more of a commitment from within the Eurozone before the outside world considers providing more funds to the IMF. However, Germany is resolute European rescue funds – ESM and EFSF – should not have their limits increased as it would mean struggling nations may become complacent. Yet, German Finance Minister Schaeuble did state Europe would decide on the issue in March, possibly at the EU summit later in this week which has been called specifically to debate this question.
The second ECB 3-year LTRO takes place on Wednesday, which is expected to be a key risk driver for the week. Bundesbank President Weidmann said there is no discussion about scheduling a third 3-year LTRO afterwards.
New Zealand unexpectedly posted a trade deficit in January, with imports exceeding exports by NZD199 million from a revised NZD306 million surplus in December. Consensus estimates had been looking for a surplus of around NZD167 million. NZD/USD faced some initial selling pressure following the announcement, slipping around 20 pips.
The political wrangling in Canberra created some volatility in the aussie, especially as members entered the caucus room to hear speeches from both contenders. AUD/USD did manage to climb to a high around 1.0718, before sinking below 1.0700 as the result drew nearer. At the time of writing, the current low for AUD/USD is around 1.0665 and EUR/AUD is hovering around 1.2600.
Over the weekend, the G20 meeting failed to produce any significant results regarding boosting IMF resources aimed at proving extra firepower for Europe if needed. Many non-European officials are calling for more of a commitment from within the Eurozone before the outside world considers providing more funds to the IMF. However, Germany is resolute European rescue funds – ESM and EFSF – should not have their limits increased as it would mean struggling nations may become complacent. Yet, German Finance Minister Schaeuble did state Europe would decide on the issue in March, possibly at the EU summit later in this week which has been called specifically to debate this question.
The second ECB 3-year LTRO takes place on Wednesday, which is expected to be a key risk driver for the week. Bundesbank President Weidmann said there is no discussion about scheduling a third 3-year LTRO afterwards.
New Zealand unexpectedly posted a trade deficit in January, with imports exceeding exports by NZD199 million from a revised NZD306 million surplus in December. Consensus estimates had been looking for a surplus of around NZD167 million. NZD/USD faced some initial selling pressure following the announcement, slipping around 20 pips.