Opened in Asia at $1.0380 trading down to $1.0367 before pushing up to $1.0385. Soggy equities and a much weaker than expected PPI ahead of tomorrow’s important CPI data led the pair sharply lower to $1.0326 before a stronger HSBC Flash China manufacturing PMI reading and option related buying led a bounce to $1.0349. PPI data showed producer prices falling by 0.3% from expectations of +0.4% and was seen as indicative to tomorrow’s CPI release, with traders now strongly pricing in a 25 bps cut from the RBA at their next rate meeting. Exporter and option related bids remain under $1.0340 down to $1.0300, with stops aligned on a break of the latter. Aussie-yen fell back sharply on the PPI data from Y84.74 to Y83.92 before a small recovery to Y84.14. Traders are now eyeing Friday’s BOJ meeting with further expansion expected in the form of longer term bond purchases. EUR/AUD pushed up from A$1.2708 to A$1.2769 and AUD/NZD slipped from NZ$1.2702 to NZ$1.2657 before settling later around NZ$1.2670.
EasyForexNews Research Team