The U.S. dollar gained versus the euro and British pound on Tuesday, finding support amid ongoing worries about debt problems in the euro zone after Fitch Ratings warned that Portugal remained vulnerable to a downgrade.
The U.K. global goods trade deficit widened unexpectedly in January to its largest level since August 2008 due to weaker exports. Meanwhile, the rise in U.K. house prices slowed sharply in February as supply outpaces demand
China´s passenger car sales totaled 942,900 units in February, up 55.3pct on a year earlier. While the annual growth rate was down from 115.5pct in January, the results are affected by the timing of Chinese New Year.
People´s Bank of China Assistant Gov. Guo Qingping said the central bank will try to ´´prevent asset price bubbles from accumulating´´ this year but didn´t announce any new policy moves. He also said that the central bank wills ´´guard against inflationary expectations intensifying to spill over into real price rises.´´
AUDUSD: The Australian dollar was lower in Asia Tuesday on weakness in gold and the euro in the offshore session, but the local unit found some strength on a surge in business confidence and a private employment index which underscored the health of the country's job market.
Both bond and currency traders are now looking towards Chinese data due Wednesday and Australia's official employment numbers Thursday, which economists expect to show 15,000 jobs were added in February, keeping the jobless rate steady at 5.3%.
Australia's government bonds could face an interesting test of demand at the end of the month when the government ends its offer of a guarantee on term funding for banks, which could prompt some buyers to chase a higher return from non-guaranteed bank debt, rather than sovereign bonds.
We expect a range for today in AUDUSD rate of 0.9100 to 0.9180 (Long at 0.9100, stop loss at 0.9070, target OPEN)
EURUSD: The euro is coming under fresh selling pressure in Europe Tuesday as the market waits to see how U.S. President Barack Obama responds to a request from Greek Prime Minister George Papandreou for help in resolving his country's debt crisis.
Overall, global sentiment has slumped once again as investors take a more realistic view of plans for launching a European Monetary Fund to provide help for euro-zone countries in the future.
Meanwhile, the market is waiting to see how Papandreou's talks with Obama proceed and how much support it might provide for the debt-burdened euro-zone nation as it struggles to impose austerity measures for reducing its deficit.
We expect a range for today in EURUSD rate of 1.3580 to 1.3680 (Long at 1.3580, stop loss at 1.3550, target OPEN)
USDJPY: Dollar/yen currency options rose slightly in Asia Tuesday as the underlying exchange rate retraced some of the gains it made earlier in the week, boosting demand for protection against the dollar's downside.
The U.S. unit changed hands at Y89.98 as of 0300 GMT, down from Y90.33 in New York overnight. That prompted one-month at-the-money currency options to rise slightly to 11.10%/11.80%, compared with 11.05%/11.75% in New York
We expect a range for today in USDJPY rate of 88.80 to 89.50 (Long at 88.80, stop loss at 88.50, target OPEN)