Opened in Asia at $1.0488 after lows of $1.0428 in NY, as fears of a non-agreement in the Greek debt swap weighed heavily on the EUR. Central bank and real money demand then led a euro recovery which hauled AUD back up. The AUD was trading around $1.0480 when the CPI data was released with initial headlines being interpreted as poor, sending the pair to lows of $1.0442 before trader reassessed and short covering sparked a strong bounce. Aided by AUD/JPY demand, the pair headed back through $1.0500 to highs of $1.0535 just short of the NY high of $1.0536. Profit taking then led a small sell-off back to $1.0511. Futures markets now price a possible rate cut at around 66% from yesterday’s 85%. AUD offers lie towards $1.0550 ahead of technical resistance at $1.0570/75. AUD/JPY powered up to Y82.09 from Y81.22 as the AUD recovered, and USD/JPY added gains to yesterday’s break higher. AUD/NZD also leapt from early lows of NZ$1.2900 to NZ$1.2994, with EUR/AUD slumping on the CPI release from A$1.2480 to lows of A$1.2368.
EasyForexNews Research Team