Aussie confined to the low 0.76’s

The Aussie failed to make any headway overnight as traders continued to take profit on many of the cross rate pairs.

After closing around 0.7625 the Aussie took a dive on the back of euro trading. As traders attempted to force the euro below 1.2000 against the US Dollar, the Aussie was pushed to a low of 0.7585. With strong support for the euro at 1.2000 it bounced back almost a cent very quickly, dragging the Aussie up with it. This saw the Aussie manage a high of 0.7637 before settling back to around the 0.7625 level for the rest of the session. This morning has seen it holding at the 0.7620 level so far, with onshore support looking fairly solid at 0.7600.

Our cross rates had various results overnight with the euro cross holding around the same level as yesterday, the Sterling cross slightly higher and the Yen and Kiwi crosses both notably higher.

With the market looking as though it’s well prepared for tonight’s US interest rate announcement, it’s likely that trading will be kept to a minimum today. Last night’s US data came in around expectation and commodities were fairly steady. The market players pretty much ignored this, reinforcing the fact they are focused on the interest rate announcement.

If for some reason there is no move in the rate the Aussie would rebound towards 0.7700 very quickly, but the market is almost unanimous that the Fed will increase the rate. There will be market interest in the accompanying Fed statement, which will set the scene for the next market move.