Market News

The Reserve Bank of Australian was widely expected to cut interest rates at their policy meeting today but surprised markets with a 50 basis points reduction rather than the expected 25 points.

Following Friday’s unexpectedly dismal growth report from the United States,, the U.S. Dollar continues to be under pressure as the new trading week unfolds in Asia.

The Japanese Yen slipped broadly lower earlier as the Bank of Japan increased their asset purchase program by 10 trillion Yen, slightly more than experts had expected.

The U.S. Dollar Index stayed close to a 3-week low as the Federal Reserve took a more dovish stance than markets were expecting.

The Euro edged higher against the U.S. Dollar in Asian trading, boosted by a return to risk appetite following a series of successful sovereign debt auctions from Spain, Italy and the Netherlands.

The Aussie Dollar struck a 2-week low versus the U.S. Dollar as expectations of a rate cut were bolstered on weaker than expected inflation data.

The Euro slipped off a 2-week peak versus the U.S. Dollar, pushed there on news that the IMF has decided to increase its safety net intended for the Eurozone by 100%.

The Japanese Yen continues to hold close to recent lows against the U.S. Dollar, as investors are hesitant to move too aggressively ahead of next week’s policy.

In the Eurozone, the focus will turn to Spain and the next auction of Spanish 2-year and 10-year. Analysts says that the Euro is likely to be under renewed pressure as the auction looms, and could test support at $1.30.

The safe haven currencies fell in Asian trading as commodity-linked currencies staged a comeback. The Japanese Yen fell broadly and extended its fall from the 7-week peak versus the U.S. Dollar struck earlier in the week.

Chinese stock prices plummeted for the second day following reports that the country’s FDI (foreign direct investment) was down 2.8% in Q1 2012 as compared with the same period last year.

The Euro hit a 1-month trough against the U.S. Dollar and 1½-year low versus the British Pound Sterling as rising Spanish bond yields brought new worries of Eurozone debt contagion.

For the second consecutive day, the Euro had edged higher against the U.S. Dollar and touched on a 1-week peak but analysts agree that the Eurozone’s debt crisis is likely to minimize potential gains.

Commodity linked currencies jumped as risk appetite was whetted following yesterday’s comments by on ECB official who hinted that there was a possibility that the central bank could embark on additional bond purchases.

The safe haven Japanese Yen remained near a multi-week peak versus a broad mix of currencies on heightened risk aversion.