Intraday Market Thoughts

AUD Higher After RBA Minutes, IMF Funds Fall Short

by Adam Button
Dec 20, 2011 2:25

The euro posted small losses in a quiet session on Monday lower despite a broader risk-averse theme. Early Asian trading has been characterized by solid gains in AUD and NZD after the RBA minutes were less dovish than expected. The link to Ashrafs interview with CNBCs Maria Bartiromo is below.

Draghi reiterated that treaties prevent the ECB from increasing government bond purchases to fight the crisis and said substantial risks to the economy remain.

Late in US trading Eurozone finance ministers announced an agreement to on additional bailout funding via the IMF. But the 150 billion fell short of the 200 billion proposed at the Dec. 9 EU leaders summit.

Ashraf's interview on the euro & ECB on CNBC

The stock market took the news much worse than FX as the S&P 500 fell 1.17% to 1205 but the euro was able to hold above 1.30 after opening the week at 1.3045.

Large banks were also hard hit after the WSJ reported that the Fed will embrace rules requiring systemically important institutions to hold more capital in reserve. Basel officials also said lenders should reveal the full list of instruments they are holding to meet those capital requirements.

AUD/USD jumped 40 pips after the RBA minutes said a modest rate cut was appropriate and policymakers noted some positive economic signals, saying growth in Asia is solid and that the domestic economy is slightly stronger than in the middle of the year.

Our latest trades include 7 existing trades (2 EURJPY, 2 USDCAD, 1 AUDNZD, 2 gold), Both AUDUSD were stopped out, 1 EURUSD & 1 AUDNZD hit all targets, while none of the 2 silver trades were filled. Direct access to these trades is found here: Non Subscribers can click on here:


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