The Australian dollar surged through the European session as it peaked up at 93.87 US cents, up about 60 pips after it has eased at the tail end of our local session. The strength however was only one session long with the US dollar regaining all of the ground the Aussie had put on from the open pushed back to 93.05 US cents. We didn’t really have any major driver for the selloff other than the Summer’s risk asset rally being overbought with an FOMC decision coming up this week. The other major USD crosses such as the Pound, Yen and Kiwi saw the same 50 pips ripped from their early gains also.
The Euro has an interesting session also with Mario Draghi not stating anything too outrageous during his speech overnight. The Euro remained well supported as he pushed for more government drive growth in the region helping the Euro to trade to 1.3385 USD before it also slumped back about 50 pips through the US session. CPI data from Europe was on target at 1.3% year on year which had little effect.
The RBA’s Monetary Policy Meeting minutes are up at 11.30am and will be a decisive factor in what has been a volatile start to the week for the Australian dollar. The minutes however will come from before the last week’s poor jobs numbers so there possibly might be more positive than first thought.
Joel Murphy
www.pepperstone.com Joel Murphy is a currency analyst and market commentator for Forex Broker Pepperstone and he regularly features on Sky Business News Australia. He has worked in both retail and institutional Forex for last 8 years and completed a Bachelor of Commerce and a Bachelor of Arts from Monash University
