Australian Dollar | Latest Australian Dollar Exchange Rate News
Australian dollar is star performer on forex markets; this morning's Exchange Rates Today report
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- Category: Australian Dollar
- Published on Tuesday, 07 February 2012 09:43
- Written by Will Peters
Exchange Rates Today: The Australian dollar (AUD) was the stand-out performer overnight, breaking through 1.08 as the RBA surprised investors and left its cash rate on hold at 4.25%.
"There was a unanimous consensus for a 25bp cut so the move was very surprising. The board noted that policy was appropriate “for the moment”. This suggests the bank still has an easing bias and will “adjust the cash rate as necessary to foster sustainable growth and low inflation”. Our Australian economists continue to see a modest trimming of the cash rate over the coming months given the continued uncertainty around Greece, mixed domestic data and the high AUD," says Chris Walker, FX Strategist at UBS.
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The Australian dollar is now at stretched levels and UBS advise that they would look to fade any move higher from here, in fact on Monday forex strategists entered a trade recommendation to go short AUD via a 3m AUD put /USD call option, taking advantage of the recent decline in volatility.
Elsewhere on the forex markets, the news wires were quiet on Greece overnight and the EUR managed to recover some lost ground during the US session but the commentary from the Eurozone remains rather gloomy.
After talks, German Chancellor Merkel and French President Sarkozy both expressed frustration with the state of PSI and troika talks on Greece, as the Greek PM had to postpone domestic talks on reform to meet the troika’s demands.
EU leaders have expressed dismay at the slow pace of implementing changes, but also expressed the view that allowing Greece to default or exit the Eurozone would also be unacceptable.
The focus on Tuesday will be on final headlines from domestic parties in Greece and the various agreements made to obtain support for further troika funding.
Details for the PSI and OSI will also be sought, but the IIF and Greece have missed so many deadlines over the past few weeks that markets are not particularly attuned to fresh news on this front, given the mathematics involved have been communicated in advance.
Today, industrial production data out of Germany is due, while policymaker commentary by Thomas Jordan may attract some attention, particularly after his comments last week reaffirming the central bank’s resolve in defending the Eurozone.
Fed Chairman Bernanke’s testimony to the Senate Budget Committee should not differ from his House testimony, though a more upbeat tone can be expected in the wake of the latest unemployment report.
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