Forex Asia Review – Aussie dips after RBA signals further rate cuts

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Euro continues to remain under pressure and the main driver behind its weakness is still the political uncertainty in Greece and the increasing possibility of its exit from the euro zone. Greek party leaders will reconvene later today to attempt to end the deadlock and try form a government. If this fails, then new elections will be scheduled and this puts at risk the country’s commitment to austerity measures and the bailout terms. Adding to damp sentiment, Moody’s downgraded 26 Italian banks and left all of their outlooks negative.

EURUSD briefly touched a fresh four-month low of 1.2813 during Asian trading hours , down 0.6 percent from Monday. The rest of the session was mostly sideways price action as markets await more news from Greece.

GBPUSD saw some profit taking after a rally on Monday and traded a range of 1.6084 -1.6103.

EURGBP was little changed after a sharp drop yesterday to a 3-1/2 low, and consolidated losses in Asia between 0.7964 – 0.7974.

USDCHF marked a new four-month high of 0.9371 in Asia thanks to a broadly stronger dollar due to safe haven demand.

USDJPY consolidated between 79.80 – 79.92. EURJPY moved sideways and hovered around a three-month low of 102.21.

The Australian dollar briefly dipped to a five-month low of $0.9944 after the Reserve Bank of Australia policy minutes of its May meeting showed concerns about a sluggish growth and inflation. The RBA signalled that it left room for another rate cut in June.