Opened in Asia at $1.0525 after highs of $1.0573 yesterday afternoon and largely tracked the EUR/USD this morning with an early high of $1.0535. The pair headed lower as S&P downgraded 4 French banks in the wake of the sovereign downgrade on Jan13. Bids at $1.0510 eventually wilted under hedge fund and sovereign sales leading to some weak stops tripped to lows of $1.0484. Latter sales from offshore names keeping the AUD pegged around $1.0500. EUR/AUD recovered yesterday from early lows of A$1.2273 to opened this morning at A$1.2367 and headed higher to A$1.2393 before settling around A$1.2385. AUD/JPY slipped with the AUD/USD from Y81.15 to Y80.73, before steadying around Y80.90. Australian treasurer Swan pointed out that November’s growth forecast cut of $3.25% from $4.00% was on the back of European recession, but many traders are now more focussed on Wednesday’s Q4 CPI data which is likely to hint at a 25bp rate cut next month.
EasyForexNews Research Team