• Home ::
• Fundamental ::
• Market View ::
• European and US summary

• Send
• Print
• Add To
• Rss

European and US summary

0e00c9b6-4187-4781-94c3-fdd9cae18dfc

0

0

Oil Loses Ground, USD Higher

Tue, Sep 2 2008, 23:26 GMT
by Korman Tam

Forexnews.com

9/2/2008 3:14 PM: EUR/$..1.4516 $/JPY..108.77 GBP/$..1.7824 $/CHF..1.1062 AUD/$..0.8386 $/CAD..1.0684

Oil Loses Ground, USD Higher

The greenback firmed across the board, rallying to 1.7783 against the pound and 0.8272 versus the Aussie on the heels of further weakness in crude oil, which eased to its lowest level since January down nearly 5% to $109.71 per barrel. Economic reports released earlier saw August manufacturing ISM reveal contraction in the sector, at 49.9 versus 50 from July. In the coming session, markets will look ahead to August Challenger layoffs, July durable goods, and factory orders. The key highlight will be Friday’s US jobs data, expected to post more job loss with non-farm payrolls at -73k.

The Bank of Canada will also will announcing the results of its policy deliberation tomorrow at 9:00 AM, with no change expected. The Loonie traded at a one-year low against the greenback, falling to 1.0746 amid weakening crude oil.

 
RBA Cuts 25-basis points, AUD hits 1-year low

The Aussie came under heavy selling pressure in the European session, plunging from above the 0.85-level to its lowest level in nearly a year to 0.8272. The Reserve Bank of Australia, as expected, cut its benchmark lending rate by 25-basis points to 7.0%, saying “the Board judged that there was now scope for monetary policy to become less restrictive”. The RBA expects “household demand will remain subdued and overall economic growth slow over the period ahead”, while inflation is expected to ease beneath 3% during 2010.

We look for the RBA to continue easy policy over the coming months, with at least another 50-basis point cut in the offing bringing the Bank’s key interest rate to 6.5% by year-end. Further, with additional declines in oil and commodity prices anticipated, the Aussie is likely to remain pressured against the greenback and yen over the coming months.

AUDUSD has since recovered to just beneath the 0.84-level, off its one-year lows from earlier in the session at 0.8272. Resistance is seen at 0.84, followed by 0.8420 and 0.8460. Subsequent ceilings are eyed at 0.85, backed by 0.8540 and 0.86. On the downside, support begins at 0.8330, backed by 0.83 and 0.8270. Subsequent floors will emerge at 0.8235, followed by 0.82 and 0.8160.

Published on  Tue, Sep 2 2008, 23:28 GMT