Forex Asia Review – Aussie rallies after strong jobs report

Important: This page is part of archived content and may be outdated.

Euro held on to most gains made after a strong rally against the dollar yesterday after the ECB did not cut interest rates and kept the growth outlook unchanged. Rates were held at 1 percent and the ECB said it is always ready to act when required but within the scope of its mandate. Draghi said the bank will not pre-commit though, and it is the responsibility of the governments, not the ECB, to deal with fiscal shortcomings.  After reaching a high of 1.2584 in the U.S. session, EURUSD opened in Asia at 1.2580 easing slightly on profit taking to 1.2556.

 

Looking ahead, the focus turns to Fed Chairman Ben Bernanke’s  testimony to Congress on the U.S. economy later today. Any hints on the possibility of more quantitative easing are seen as key.

 

Cable tracked EURUSD and also eased slightly on profit taking.  GBPUSD edged down to 1.5467 from the U.S. session high of 1.5502. Market participants will remain on the sidelines ahead of the Bank of England policy meeting today to wait for the interest rate decision.  EURGBP did little in a tight 0.8114-25 range.

 

Yen weakness continued into the Asian session with USDJPY extending higher to 79.43, the highest since May 30. EURJPY hit  a high of 99.88 and mostly consolidated above 99.62 after a strong rally yesterday.

 

Aussie was one of the strongest performers with AUDJPY once again in the lead after a strong Australia jobs report pushed the pair higher. This comes after a strong rally yesterday following a better than expected GDP report. Australia added more than expected jobs last month with 38,900 jobs, capping the best January-to-May period of hiring in five years. AUDJPY surged to a high of  79.15, the highest since May 17.  AUDUSD  rose to 0.9967 after the jobs report from a low of 0.9885.