Opened at $1.0755 in Asia but came under early pressure as hedge funds and Asian names sold in the absence of any headlines out of Brussels regarding the debt deal agreement. An article in the FT that some EU states were reluctant to add their consent to the deal over speed of debt reduction, pushed the pair through $1.0690 stops to lows of $1.0680, before the EU finally announced a deal had been struck which led a sharp rally back to $1.0748. Strong EUR/AUD buying following the announcement produced a spike to A$1.2381 from early lows of A$1.2307, which has since weighed on the AUD/USD. AUD/JPY trade was choppy through a Y85.17-72 range. GBP/AUD tracked EUR/AUD pushing up strongly from A$1.4731 to A$1.4805. RBA minutes showed that a rate cut was not discussed in the last meeting, but the bank would be open to further easing if necessary. Governor Stevens stated funding costs hadn’t fallen as much as the cash rate, and that bank’s responded to higher funding costs when rates were hiked. AUD/USD stops sit down at $1.0625 with resistance remaining up around $1.0750.
EasyForexNews Research Team