March 26, 2010
The Aussie's rally was short-lived yesterday since it was unable to hold on to its latest gains. The AUDUSD climbed to a high of 0.9141 before dropping back below the 0.9100 handle during the US session.
The RBA financial stability review, which was released yesterday, revealed that the central bank believes that the recent rise in poorly performing commercial property loans needs close monitoring. Apart from that, the review confirmed that everything is still A-okay with the Australian economy. RBA Governor Glen Stevens echoed this optimistic sentiment in his speech yesterday. He also mentioned that large economies, such as the US and the UK, need to reduce spending while Asian economies could spend more and allow their currencies to appreciate. Hmm, this rhetoric sounds familiar... Well, that's the ongoing argument for global trade and currency rebalancing!
The only economic report released from Australia was its CB leading index, which printed a 0.2% decline for January, following the 0.6% rise seen in December. This forced the Aussie to cough up some of its profits during the day.
Australia won't be releasing any economic reports today so watch out for economic reports from other nations, particularly the US, which will release its final GDP and University of Michigan consumer sentiment report. Also keep an eye out for developments concerning the Greek debt situation, which could cause wild swings in risk sentiment!
"The only cable I watch is the pound baby."