Forex Asia Review – Australian Dollar falls after weak retail sales data

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The Euro was steady in the Asian trading session against the dollar, in consolidation and hovering around the levels reached after the big drop on Monday due to concerns resulting from surging Italian and Spanish bond yields. General risk aversion remained in the markets as fears linger over the Eurozone debt contagion, as well as a weak outlook for global growth and the prospect of a U.S. credit rating downgrade. EURUSD traded between 1.4159 and 1.4216.

 

Cable opened Asia at 1.6299 and managed to hold above yesterday’s 1.6222 low, when the Pound dipped after weak U.K. data. GBPUSD was confined to a 1.6248 and 1.6306 range. A wave of risk aversion weighed on the Pound, keeping it down. More U.K. data on services PMI due later today could weigh on Sterling further if data results fall as predicted.

 

The Yen kept steady against the U.S. dollar as the BOJ governor reiterated that he is closely watching the markets and will intervene if necessary to stabilize the Yen, which he believes that did not strengthen due to Japan’s own economic fundamentals. Investors are now cautious of buying and holding Yen for too long. USDJPY traded the session between 77.38 and 77.02.

 

The Australian dollar fell to a two week low against the U.S. dollar, extending its fall from Tuesday when the Reserve Bank of Australia sounded less certain about the global economy and left interest rates unchanged for a nine straight month at 4.75 percent. Also weak June retail sales data released today showed a dip of 0.1 percent against a forecast of a 0.3 percent rise, which hurt the Aussie as well. AUDUSD fell from the Asian open of 1.0777 to a low of 1.0676.

 

Gold edged up to another record high in Asian trading as investor demand picked up for the safe haven asset in order to protects themselves from the consequences of the deteriorating growth outlook for the global economy and Europe’s worsening debt crisis. Spot gold rose to $1,661.42 from $1,660.57.