EURUSD: 1.2491 - 1.2542. USDCHF: 0.9577 - 0.9615. GBPUSD: 1.5373- 1.5408. EURJPY: 97.86 - 98.27. USDJPY: 78.46 - 78.28 DowJones: 12'101.46 -0.14% NASDAQ: 2'760.01 +0.46% S & P 500: 1'278.18 +0.01% Nikkei: 8'382.00 +1.01% Shanghai: 2'312.51 +0.17% Gold: $ 1'618.10 Crude Oil: $ 84.64
Overnight, the RBA has eased its overnight cash rate by 25bps to 3.5% despite that most economists were targeting a 50bps rate-cut. The central bank cited the economic weakness in Europe and more moderate China growth as the main reasons. After the news was released, the traded up to 0.9790 boosted by short-covering before easing to 0.9760.
With no new negative outcomes from the Eurozone, the EUR was able to consolidate higher as the currency was also helped by short-covering - most forex investors placed their bets on the G7 conference call later on today. Indeed, the traded above the 1.2500 mark in the Asian session with investors hoping for EZ policy makers to take decisive action in relation to the euro-area debt and banking crises.
Standard & Poor's also released a report which attributed a one-in-three chance of Greece exiting the single currency. The news wasn't a mover, as S&P also stated "that other sovereigns would be unlikely to follow any Greek exit".
The UK is still on holiday today as they celebrate the Queen's diamond jubilee, but ahead of us today's economic docket remains relatively busy as we expect amongst others EZ PMI Services & Retail Sales. Markets will also likely focus on the BoC Interest rate decision later today as well. The BoC is not expected to follow the RBA as it remains one of the least dovish central banks in the G10 environment.
From the United States we also have the US ISM Non-Manufacturing PMI which should provide more direction ahead of Bernanke's testimony next Thursday - there is mounting speculation for another round of Quantitative Easing.