Aussie leads market rebound with impressive GDP numbers
After a two day bank holiday in the UK, Europe´s largest currency dealers are now back at their desks. There is already some impressive liquidity out there with a very positive start to the day´s trading. The Australian dollar is the stand out performer, following better than expected GDP numbers this morning which came in at 1.3% versus the expected 0.5%. coming on the back of a rate cut, this bodes well for the Australian economy and by implication, China. The AUD/JPY is up 1.20% with the AUD/USD up 0.98%.
The yen pairs are performing especially well as the yen weakens on speculation that the Bank of Japan will step in to intervene and reverse the currency´s recent rally. The USD/JPY is up by another 0.17% this morning.
The Australian dollar isn´t the only strong currency this morning, with a broad spread of buying interest this morning. Hopes are high that central banks will follow the Reserve Bank of Australian in cutting rates or providing other methods of stimulus. The GBP/JPY is up 0.61% with the GBP/USD Up 0.47%.
The euro is lagging though, with the EUR/JPY up 0.46% and the EUR/USD up 0.33%.
This morning we have UK construction PMI at 09.30 with a drop to 54.5 expected. Eurozone revised GDP is expected to come in flat, while German industrial production is come in at -0.9%. The European Central Bank set interest rates at 12.45 with the press conference to follow at 13.30. At 13.30 we also have revised on farm productivity, with the Biege book at 19.00.
With markets recovering the last few days, we have a choice of following the trend with a pair like the AUD/JPY or countering the move with a pair like the EUR/ USD. Considering the fact that nothing concrete has actually been announced in the last few days, we´re inclined to go against this recovery. The ECB has already strongly stated that it will be leaving governments to sort out their own mess so to speak, so there is unlikely to be anything new from the ECB today.
There have been no concrete solutions to the fundamental problems with the euro so a good way to play this might be a LOWER trade on BetOnMarkets.com on the EUR/USD predicting that the pair will close below 1.2450 in 2 days time for a potential return of 123%.
Get this trade now, go to: http://goo.gl/lWw9c
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