AUD Slips to 4-Month Low; Yen Finds Form Ahead of BOJ Nomination
By Chris Gore | February 22, 2013 10:42 AM EST
AUD slips to 4-month lows
There was little in the way of catalysts to inspire any sort of meaningful correction from the Aussie dollar overnight. Equity losses and residual greenback support from Wednesday's FOMC meeting kept the balance of risk away from high beta currencies with the Kiwi leading the charge lower. Still, we saw key support kick in around 102.2 US cents which thwarted what could have been a deeper trough to the next level of technical demand at 101.5 US cents.
The next key directive for the Aussie dollar will be RBA Governor Glenn Steven's appearance before the House of Representatives Standing Committee today from 9.30am. While markets may be well-informed given the recent release of the RBA minutes and SoMP, trader will attempt to decipher the overall tone of his testimony, for which we can expect the usual banter surrounding currency strength to remain a key topic. Once again we're eyeing key support at 102.2 to keep contain any selling with a move below likely to fuel further losses. In the absence of any positive surprises from Governor Stevens, we likely to see upside contained at 102.65/75 US cents.
At the time of writing the Australian dollar is buying 102.45 US cents.
Dollar extends rally; Yen finds form ahead of BOJ nomination
Movement across major currencies reflected typical risk-off behavior overnight. The U.S dollar extended its rally against risk currencies and the Japanese Yen outpaced major rivals including the greenback.
Equity markets from both side of the Atlantic slid as market participants reacted to a host of less than inspiring data points.
Both the services and manufacturing component of latest Euro-region PMI data recorded a surprise contraction in February. According to preliminary estimates, the services sector fell to an index level of 47.3 in February, while the manufacturing edged down to 47.8. Although both were expected to remain in contraction territory below the '50', markets had widely expected moderate growth from both the services and manufacturing sectors. A similar under-performance from the German survey was also noted, and investors subsequently recalibrated growth expectations. European equity markets slumped, with the EURO STOXX-50 Index finished a notable 2.29 percent lower.
The news wasn't much better from the United States with markets still considering the potential scaling back of Fed asset purchases, while responding to fresh evidence the economic recovery remains tentative. The closely watched Philadelphia Fed manufacturing gauge fell to -12.5 in February, underwhelming market participants who had positioned for moderate expansion.
The Euro followed equities lower with deep losses noted against the Yen and U.S dollar. The EUR-USD rate slipped below into the 1.31 handle for the first time in over a month and remains vulnerable to another leg lower should support at $US1.3150 fail to hold.
The USD-JPY pair consolidated lower with market participants remaining highly sensitive to headline-driven conjecture surrounding the appointment a new Bank of Japan Governor. It's expected Prime Minister Abe will announce his nomination by month-end, and it would seem three dovish contenders remain in the running.
- Asian Development Bank President, Haruhiko Kuroda
- Former Vice Finance Minister, Toshiro Muto (Former BOJ deputy governor)
- President of the Japan Centre for Economic research, Kazumasa Iwata (Former BOJ deputy governor)
At the time of writing the U.S dollar is buying 93.1 Yen.
Most Popular Slideshows
- Derek Jeter With The New York Yankees Through The Years [IN PICTURES]
- George Clooney And Amal Alamuddin's Wedding In Venice: Photos Of Groom And His Family, Friends [Slideshow]
- NFL Recap - Week 4: Green Bay Packers 38, Chicago Bears 17 [PHOTOS]
- Kendall Jenner Rocks Semi-Nude Balmain Lattice Dress At Paris Fashion Week [PHOTOS]
Join the Conversation
- Australian Stock Market Report – Afternoon September 29, 2014
- Australian Stock Market Report – Morning September 29, 2014
- Australian Stock Market Report – Midday September 30, 2014
- Environment Ministry OKs $2.2B North Galilee Basin Rail Project On 23 Conditions
- Australian Stock Market Report – Afternoon September 30, 2014
- Forget Nexus 6 Release Date, Android Phones Will Soon Showcase Pure Google Apps & Features
- Galaxy Note 4 Pre Order Starts in the US, Get Samsung Note Ahead of October 14 Release
- $249.99 Motorola Moto 360 Smartwatch's First Promo Out; 'Stone Leather' Replaces 'Gray Leather' - Available In BestBuy [Watch Video]
- iPhone 6 vs Moto G 2014: Motorola’s Budget Smartphone Takes On Apple’s Premium Smartphone
- BlackBerry Passport Sold Out As Preorders Reached 200,000
- iOS 8 And iOS 8.0.2 Security Flaw Revealed, Anyone Can Easily Bypass Touch ID And Passcode Security Features
- Australia Cracks Down On International Money Laundering Syndicate