Forex Market
AUD/USD Analysis
The AUD is trading off of their worst levels Wednesday, buoyed by improving Chinese and U.S. manufacturing data and a sharp rally on Wall Street. The rate managed to hold above $1.0300 yesterday, after the RBA surprised markets by lowering its key rate 50bps to 3.75%.
USD/JPY Analysis
USD/JPY opened st Y80.10 in Asia Weds, before slowing ticking higher to touch an initial intraday high at Y80.26. Light offers were initially seen at Y80.30 and the pair slipped back towards the lows.
Currencies in a holding pattern; China’s “other” PMI contracts
Having seen the mildly bullish official China manufacturing PMI data yesterday, it was the turn of the HSBC equivalent today. A similar trend was displayed with the index rising to 49.3 in April compared to 48.3 in March (official PMI was 53.3).
GBP Analysis
Opened early Europe at $1.6230 stg0.8164, GBP closed in NY at $1.6238, after rate had recovered off traded lows at $1.6222 to $1.6240. Rate edged up to retest $1.6240 in early Asia before drifting lower through the balance of the session to an eventual low of $1.6223 ahead of the European open.
JPY Analysis
Opened in early Europe at Y79.76 and Y105.69, USD/JPY opened at Y79.85 in Asia and traded sideways with markets subdued due to Asian and European holidays which kept players sidelined.
EUR Analysis
Opened early Europe at $1.3251, EUR/USD closed in NY at $1.3240 after recovering off session lows of $1.3209 (Europe low $1.32076). Rate retained a subdued attitude through most of Asia, with more attention seen on yen plays, Japan returning after the Monday holiday, and Aussie ahead of the RBA rate decision.
GBP/USD Analysis
Closed in NY at $1.6238, after rate had recovered off traded lows at $1.6222 to $1.6240. Edged up to mark overnight highs at $1.6240 before drifting lower through the balance of the session to an eventual low of $1.6223 ahead of the European open.
EUR/USD Analysis
Closed in NY at $1.3240 after recovering off session lows of $1.3209. Rate retained a subdued attitude through most of Asia, with more attention seen on yen plays, Japan returning after the Monday holiday (though only in Tues-Weds this week), and Aussie ahead of the RBA rate decision.
AUD/USD Analysis
Aussie dollar is trading in deep negative territory at $1.0328 near session lows Tuesday, after the RBA cut the cash rate 50bps, bigger than the majority of the market had anticipated.
RBA delivers a 50bp cut, more than the majority had expected
Mayday holidays impacted activity in Asia but we had enough economic events on the agenda to keep us busy. Most importantly, the RBA slashed the Cash Rate Target by 50bp to 3.75 percent, a sharper move than the market had been expecting with only a 30 percent chance of the larger cut priced in beforehand.
USD/JPY Analysis
USD/JPY opened at Y79.85 in Tokyo Tuesday and has been tied to narrow ranges, as most FX pairs are rangebound. Markets are subdued with Asian and European holidays keeping players sidelined.
Behavioral Finance: Daily Forex Outlook: Growth has yet to trump austerity
EUR USD (1.3250) A closer look at the latest soft US GDP data reveals that although consumer spending rose 2.9 percent, the fastest pace in five quarters, it was not accompanied by a parallel growth in public spending.