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AUD/USD spikes on 0.9392 as Summers leaves for “summer vacation”

FXstreet.com (Athens)- The AUD/USD climbed almost to 0.9400, when news wires around the globe suggested that “Summers has taken himself out of the race to be the next chairman of the Federal Reserve”.

AUD/USD soars on Yellen probable choice as she is considered much more dovish

The AUD/USD skyrocketed near 0.9400 area, as Yellen, the Vice-Woman of Fed is considered as the top-favorite to take over the Fed’s chair, when Bernanke steps down in January. Elaborating on, due to the fact that Yelle, is very dovish indeed, traders might not find out of the blue, if she toes a much likely stance to that of Bernanke. However, the “greenback” was also sold not only on Summers resignation, but also due to the fact that news wires report that “US and Russia agree on framework to securing Syria's chemical weapons by mid-2014; inspectors start in November.” With dovish Yellen on leading position for the Fed’s top chair and amidst diminishing Syrian’s risk, risk-appetite is boosting significantly in early European session.

Technical Outlook on AUD/USD

On the other hand, the Germany’s anti Europe-party could leave next Sunday’s election result open. What’s more, today we are ahead of two significant data (NY Empire index and industrial production), while all eyes are on FOMC as traders weigh September taper odds. Emmanuel Ng of OCBC Bank notes that with the disappointing labor market numbers shaving off near term topside potential for the pair, AUD-USD has rejected the previously mentioned sticking point around 0.9320 and a retracement back towards 0.9200 cannot be discounted where buying interest may reemerge.

Session Recap: USD sold off on Summers exit; Tokyo closed over holiday

The week started in the Asia-Pacific with news over Larry Summers withdrawing from Fed chairmanship race, which is seen by market participants as USD bearish, leading to a USD/JPY sell-off to session lows at 98.39, and EUR/USD rally to session highs at 1.3383, while AUD/USD posting fresh 3-month highs at 0.9402 and Cable to 9-month highs at 1.5958.
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Flash: Expecting a $20bn Fed taper - RBS

In a research note published earlier today, Greg Gibbs, FX Strategist at RBS, notes that US Economists forecast a $20bn tapering to $65bn per month on Wednesday, split evenly between Treasuries and Agency MBS.
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