Opened in Asia at $1.0726 after lows in NY/Europe yesterday of $1.0683/88. the pair eased down to $1.0693 ahead of an expected 25bp cut from the RBA and a weaker Shanghai composite. The announcement that rates would remain on hold caught the market wrong-footed and led a spike higher through a $1.0800 barrier to $1.0810, despite a mildly dovish accompanying statement from the central bank. The RBA felt that rates could remain on hold due to improvements in the US economy and signs of stabilization in Europe’s banks and debt markets. EUR/AUD was crushed from early highs of A$1.2258 to fresh all time lows of A$1.2139 on the reaction. GBP/AUD was a similar tale, falling to A$1.4782 to
A$1.4641. AUD/JPY roared to Y82.90 from Y82.01, stopping just short of a string of buy orders through Y82.90/00, with Japanese investors now supporting any notable tick backs. AUD/NZD hit lows of NZ$1.2829 before the RBA release, then spiked to NZ$1.2941 before settling later around NZ$1.2935. AUD/USD stops are now in place on a break of
$1.0820 with decent sell orders now surfacing above there at $1.0870.
EasyForexNews Research Team