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European and US summary

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Dollar Edges Higher

Tue, Nov 3 2009, 22:26 GMT
by Korman Tam

Forexnews.com

11/3/2009 1:57 PM: EUR/$..1.4703 $/JPY..90.33 GBP/$..1.6415 $/CHF..1.0268 AUD/$..0.9009 $/CAD..1.0677

Dollar Edges Higher

The dollar was mixed against the majors, climbing higher against the euro to 1.4628 but sliding versus the British pound past the 1.64-level to 1.6419. Spot gold rose to a new record high above the $1,080-mark to $1,083.50 per ounce while crude oil continued to trade beneath $80-per barrel.

The US economic reports released earlier today saw September durable goods and factory orders. The headline durable goods orders increased by 1.4% in September versus 1.0% previously, while the ex-transportations figure rose by 1.2% from 0.9% in August. Meanwhile, factory orders reversed the 0.8% decline in August, increasing by 0.9%.

The key highlight on Wednesday will be the ADP private sector payrolls, which are seen improving to reflect a loss of 188.0k jobs in October from 254.0k jobs a month earlier. Also due out tomorrow will be the October non-manufacturing ISM report, estimated to improve to 51.8 from 50.9 in September.
 
RBA Tightens Policy

The Reserve Bank of Australia lifted its benchmark lending rate by 25-basis points to 3.5% when it announced its policy decision in the early Tuesday session. In the accompanying statement, RBA Governor Stevens sounded an optimistic tone, saying “economic conditions in Australia have been stronger than expected and measures of confidence have recovered” and “the rate of unemployment is now likely to peak at a considerably lower level than earlier expected”. The statement touched on the recent strength of the Australian dollar, noting “that the rise in the exchange rate is likely to constrain output in the tradeables sector and dampen price pressures”. Stevens said that “growth is likely to be close to trend over the year ahead and inflation close to target”. Lastly, the statement added “with the risk of serious economic contraction in Australia now having passed, the Board’s view is that it is prudent to lessen gradually the degree of monetary stimulus that was put in when the outlook appeared to be much weaker”.

AUDUSD trades around the 0.90-level with interim resistance starting at 0.9040, followed by 0.9070 and 0.91. Subsequent ceilings will emerge at 0.9130, backed by 0.9165 and 0.92. On the downside, support begins at 0.8960, followed by 0.8930 and 0.89. Additional floors are seen at 0.8865, backed by 0.8840 and 0.88.

Published on  Tue, Nov 3 2009, 22:27 GMT