- RBA surprised the market by keeping rates steady at 4.25%
- They gave significant weight to the recent upbeat US data and the continued strength of commodity prices
- UK January retail sales -0.3% MoM
- Japan’s FX reserves at new record high
- Japan’s MOF confirm stealth intervention at end of 2011
- Regional stocks fall by around 0.25% on average
- Gold $1722/oz; Oil $97.25/bbl
It was another very quiet session brought to life in the last hour by a sharp rally in the AUD after the RBA surprised the market by keeping rates on hold. AUD/USD spent the first part of the session trading quietly near 1.0720 and it entered into the decision time on its session lows near 1.0700. The no-change decision sent the AUD/USD immediately to 1.0770 and from there the barrier at 1.0800 was breached. There were no large stops above there and the market topped out quickly before falling back to 1.0770. Ranges: 1.0701/1.0806
EUR/USD has been mainly influenced by EUR/AUD flows, with the cross falling to new record lows just above 1.2100. Ongoing talks in Greece are adding to uncertainty; the Greek government is still negotiating with its internal partners whilst trying to reach agreements with the Troika on a new debt package as well as negotiating with the IIF. Range: 1.3086/1.3137
USD/JPY has edged higher with talk of intervention in the air after the MOF released their latest FX reserves data which showed about $13 billion of ‘stealth’ intervention. Corporate offers are now seen as low as 76.80 and that is dampening bullish enthusiasm. Ranges: 76.50/77
Cable 1.5794/1.5831; EUR/CHF 1.2055/66
