Forex Asia Review – RBA cuts rate by 25 basis points

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Euro continued its ascent against the dollar, rising for the third day ahead of a G7 conference call today. There is optimism that measures will be taken to stimulate global growth as well as discuss how to tackle the euro zone debt crisis. This led to short covering of EURUSD in case there are any new measures coming out. The pair opened in Asia at 1.2498 and climbed to a session high of 1.2541.

 

Sterling did little during the session, trading in a tight 1.5373-1.5406 range as London markets are closed again on Tuesday for the Queen’s Diamond Jubilee. EURGBP extended gains as euro was rising across the board. The pair opened the session at 0.8123 and rose to a high of 0.8139.

 

Yen weakened against the euro as risk appetite was back during the session, thereby reducing demand for the safe haven Japanese currency. EURJPY was bid up to 98.25 from the open price of 97.89. USDJPY consolidated gains made yesterday and traded sideways between 78.56 and 78.38. Japan’s Finance Minister Jun Azumi warned recently that he would intervene if necessary to curb yen strength.

 

Aussie rose against the greenback amid speculation that global policy makers will take action to stimulate global growth. The Reserve Bank of Australia cut the benchmark interest rate by 25 basis points bringing the rate to 3.5 percent , the lowest since late 2009. This was already priced in by market participants. The accompanying statement justified the rate cut but was not overly dovish. AUDUSD opened the session at 0.9724 and rose to 0.9788.