Euro hits all time high versus the US dollar; Focus remains on Bernanke. The Australian Central Bank gave subtle indication of a possible rate hike following the upcoming Federal Election.
News and Events:
The Euro hit an all time high against the greenback today, trading at 1.4130 early this morning, continuing the dollar sell-off after the 50 basis point rate cut last week. The focus today will be on Fed Chairman Ben Bernanke�s when he speaks at 17h GMT, whether or not he will shed some more light on the reasoning behind the non-traditional 50bp cut. Investors will listen carefully for indications of inflation concerns and signs on whether the economy may dip back into a recession. For now, it seems like dollar weakness will continue across the board unless Bernanke thinks otherwise.
The Australian Central Bank gave subtle indication of a possible rate hike following the upcoming Federal Election. The market has currently priced in a 15bp hike over the next year. The downside risk for the Aussie remains high however, as growth expectations may cool.
Today’s Key Issues (time in GMT):
08:30 GBP Public Finances (PSNCR) (AUG) 3.5B vs -13.1B
08:30 GBP Public Sector Net Borrowing (AUG) 6.5B vs -6.5B
09:00 EUR Industrial New Orders (MoM) (JUL) -3.0% vs 4.4%
09:00 EUR Industrial New Orders (YoY) (JUL) 10.2% vs 13.8%
13:00 USD Fed’s Fisher Speaks in Dallas on Higher Education
13:30 USD Fed Holds Public Meeting on Banking Regulations
16:30 USD Fed’s Evans Gives Intro Remarks at Conference
17:00 USD Bernanke Speaks on Education in Washington
23:50 JPY BoJ Monetary Policy Meeting Minutes for August
23:50 JPY Corporate Service Price Index (YoY) (AUG)
The Risk Today:
EurUsd: pushed through 1.4100 and heading higher. Target 1.4160 with heavy support from 1.4000 through 1.3963.
GbpUsd Target set at 2.0366. The pair has strong support down to 2.0081. The trend is up.
UsdJpy Support holds at 113.39 with resistance still firm at 117.13.
UsdChf Breaking 1.1679 will open the door to 1.1483. On the upside, bulls will kick in from 1.1820.
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Resistance and Support:
By James Brandt - ACM Advanced Currency Markets, Geneva, Switzerland