Excluding the action out of Australia, Asia saw a pretty quiet session in anticipation of the upcoming Euro Zone Summit to be held later in the day. The EUR/USD remained in a neat sideways range between 1.3890 and 1.3935 as it waits to see if ministers of the European Union can produce a plan to fight the Greek debt crisis and more importantly gain the confidence of the global financial markets. News out over the past day as well as a poor track record of the EU conquering obstacles would seem to allude to the idea that hopes should not be set high for the announcement of a concise plan following the summit. Despite this the EUR/USD is still firmly above the 1.3900 big figure heading into the London session. It remains to be seen how thin the ice the single European currency is skating on really is.
As mentioned, Australia is where all the action was today in Asia. The CPI release showed inflation in line with 0.6% expectations but below last months 0.9% results, thus floating the possibility of a possible RBA rate cut when the central bank meets next week. The current interest rate in Australia is currently at 4.75%. The release of the data felled the AUD/USD a quick 50 pips from 1.0430 highs. Eventually lows would be made near 1.0350 while the AUD/NZD dropped under the 1.3000 big figure. As could be expected the EUR/AUD also witnessed big moves with a jump from 1.3330 to 1.3440 on the day. Next weeks RBA decision on Tuesday should be an interesting one to say the least.
The yen was mostly silent today after another round of even sterner threats out of Finance Minister Azumi hit the wires. He stated that he has alerted his staff to be prepared for direct currency intervention. This will likely keep the USD/JPY buoyed for the near term as traders keep on the lookout for any hints of the BOJ in the FX markets.
Looking ahead what else needs to be said besides the fact that the Euro Zone Summit will be the only show in town today....I wouldn’t expect any standing ovations.
As mentioned, Australia is where all the action was today in Asia. The CPI release showed inflation in line with 0.6% expectations but below last months 0.9% results, thus floating the possibility of a possible RBA rate cut when the central bank meets next week. The current interest rate in Australia is currently at 4.75%. The release of the data felled the AUD/USD a quick 50 pips from 1.0430 highs. Eventually lows would be made near 1.0350 while the AUD/NZD dropped under the 1.3000 big figure. As could be expected the EUR/AUD also witnessed big moves with a jump from 1.3330 to 1.3440 on the day. Next weeks RBA decision on Tuesday should be an interesting one to say the least.
The yen was mostly silent today after another round of even sterner threats out of Finance Minister Azumi hit the wires. He stated that he has alerted his staff to be prepared for direct currency intervention. This will likely keep the USD/JPY buoyed for the near term as traders keep on the lookout for any hints of the BOJ in the FX markets.
Looking ahead what else needs to be said besides the fact that the Euro Zone Summit will be the only show in town today....I wouldn’t expect any standing ovations.