Forex Asia Review – Australian dollar hits one year low against USD on rate cut speculation

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EURUSD opened Asia at 1.3175 and dipped to a nine-month low to 1.3163 before settling. The euro faced a sharp sell-off in the previous session on weak market sentiment due to fears of a looming Greek default after Greece admitted on Monday that it will miss its fiscal deficit target this year. Meanwhile the EconFIN meeting is still ongoing and the euro zone finance ministers are reviewing the size of the private sector’s involvement in a second international bailout package for Greece.

GBPUSD opened in Asia at 1.5433 and immediately headed down to 1.5416 before consolidation and a bounce to 1.5457. Cable mostly took direction from the EURUSD pair due to lack of domestic data, although UK data due later today on construction PMI could move sterling depending on the results. The pound has been under pressure recently as speculation grows that the Bank of England which meets this week for its monthly policy meeting will decide on more quantitative easing and printing money again.


The Australian dollar tumbled against its US counterpart to a fresh one-year low after the Reserve Bank of Australia held rates unchanged at 4.5 percent and hinted on future rate cuts if an improved inflation outlook continued later in the year. AUDUSD fell to 0.9509, its lowest since September 2010. The Aussie briefly gained before the RBA announcement following a set of strong Australian trade and building numbers but was unable to support the Australian currency which fell against most counterparts later.


USDJPY opened Asia at 76.62 and calmed in Asian session trading after falling in the prior US session. The pair moved into a range of 76.52 – 76.72 as Asian equity markets were choppy. EURJPY plunged to the lowest level in more than ten years to reach 100.74 due to euro zone debt issues which are slowing down global growth.