News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View more
Real Time News
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here:
  • 🇳🇱 GDP Growth Rate QoQ Final (Q2) Actual: 3.8% Expected: 3.1% Previous: -0.8%
  • 🇳🇱 GDP Growth Rate YoY Final (Q2) Actual: 10.4% Expected: 9.7% Previous: -2.4%
  • What is your forex trading style? Take the quiz and find out:
  • Heads Up:🇳🇱 GDP Growth Rate QoQ Final (Q2) due at 04:30 GMT (15min) Expected: 3.1% Previous: -0.8%
  • Heads Up:🇳🇱 GDP Growth Rate YoY Final (Q2) due at 04:30 GMT (15min) Expected: 9.7% Previous: -2.4%
  • Heads Up:🇹🇭 Balance of Trade (AUG) due at 03:30 GMT (15min) Expected: $0.97B Previous: $0.18B
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here:
  • Evergrande shares jump as much as 32%, with over 240 million shares traded -BBG
Dovish RBA Yields Weaker Aussie, Stronger U.S. Dollar

Dovish RBA Yields Weaker Aussie, Stronger U.S. Dollar

Christopher Vecchio, CFA, Senior Strategist

Fundamental Headlines

- China Grows 8.4% in Estimate Cited by NDRC Vice Chairman – Bloomberg

- Portuguese Bailout Expectations Anchor Yield Curve – Bloomberg

- Romney Aims to Pressure Santorum with Wins Tuesday – Reuters

- CFTC Deals Out Royal Pain – WSJ

- Obama Warns Supreme Court – WSJ

European Session Summary

Data was sparse in the overnight, but the Reserve Bank of Australia’s March rate decision provided more than enough ammunition to spark volatility midway through the Asian session. Headed into the policy decision, Credit Suisse Overnight Index Swaps pointed to a near-50.0 percent chance of a rate cut at the meeting. And although there was no rate cut (held at 4.25 percent), the RBA’s increasingly dovish stance was enough to spur market participants into the European and North American currencies and out of the Australian Dollar.

The Aussie’s woes are being compounded by forces home and abroad. At home, the Australian housing market continues to struggle (the bubble is currently deflating) and the labor market continually underperforms expectations set forth by economists. Inflation appears to be tapering off as well, and RBA policy makers made it evident that they would reconsider monetary policy given upcoming inflation readings. Abroad, concerns over a Chinese slowdown have buffeted any advances by the Australian Dollar over the past month; as Australia’s largest two-way trading partner, weaker Chinese growth prospects weigh on the Aussie similar to how weaker U.S. growth prospects weigh on the Canadian Dollar.

Taking a look at credit, European sovereign debt on the whole was weaker on Tuesday, led by the perennial underperformers, Greek and Portuguese government bonds. Of note, the Portuguese 10-year bond yield climbed to 11.212 percent – a very unsustainable level. Although Italian and Spanish 10-year bonds were weaker as well (yields at 5.095 percent and 5.361 percent, respectively), weakness by the German 10-year Bund (yield up to 1.815 percent) has buffered the market from a more decisive shift to safety; full-fledged risk-aversion would be noted by German 10-year Bund strength.

AUDUSD 5-min Chart: April 3, 2012

Dovish_RBA_Yields_Weaker_Aussie_Stronger_U.S._Dollar_body_Picture_10.png, Dovish RBA Yields Weaker Aussie, Stronger U.S. Dollar

Charts Created using Marketscope – Prepared by Christopher Vecchio

Overall, the U.S. Dollar has been the top performing major currency, gaining 0.45 percent against the worst performing currency, the Australian Dollar. Still, today’s price action is indicative of a consolidation if anything, considering that the majors have been tethered within a percent of today’s open against the U.S. Dollar. Similarly, while the U.S. Dollar’s gains are indicative of a flight to safety, there’s not a clear schism between the commodity and European currencies. Typically, on a risk-off day, the Japanese Yen and U.S. Dollar are the top performers, followed by the European currencies, and trailed the most by the commodity currencies. Today, the British Pound is the second worst performer, while the Swiss Franc is the strongest major next to the U.S. Dollar.

Speaking of the Franc, it is worth noting that as the EURCHF approaches the 1.2000 currency floor (currently trading at 1.2034), rhetoric from the Swiss National Bank is expected to sharpen to discourage speculators from shorting the Franc. The SNB’s acting President, Thomas Jordan, has pledged to defend the floor at “all costs” and all indications are that the SNB will have to raise the EURCHF floor at some point in the coming months, to at least 1.2500 or 1.3000 (lobbyists and politicians alike have called for a 1.4000 floor). A move to strengthen the EURCHF would consequently be USDCHF positive as well.

24-Hour Price Action

Dovish_RBA_Yields_Weaker_Aussie_Stronger_U.S._Dollar_body_Picture_7.png, Dovish RBA Yields Weaker Aussie, Stronger U.S. DollarDovish_RBA_Yields_Weaker_Aussie_Stronger_U.S._Dollar_body_Picture_1.png, Dovish RBA Yields Weaker Aussie, Stronger U.S. Dollar

Key Levels: 13:55 GMT

Dovish_RBA_Yields_Weaker_Aussie_Stronger_U.S._Dollar_body_Picture_4.png, Dovish RBA Yields Weaker Aussie, Stronger U.S. Dollar

Thus far, on Tuesday, the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) is trading higher, at 9941.40 at the time this report was written, after opening at 9918.58. The index has traded mostly higher, with the high at 9947.80 and the low at 9894.82.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail

Follow him on Twitter at @CVecchioFX

To be added to Christopher’s e-mail distribution list, send an e-mail with subject line "Distribution List" to

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.