FX Market Commentary – 24th June 2011

The Aussie dollar recovered from multi week lows overnight coinciding with US equity markets which were able to regain ground after a steep drop early on. The Feds dour economic assessment on Wednesday continued to encourage market participants to err on the side of caution. A similarly less than inspiring reading on weekly jobless claims appears to have exacerbated this general cautiousness. The number of US citizens claiming unemployment benefits for the week ending June 18 rose to 430,000 from a previous 420,000. Analysts had expected a slight reprieve to 415,000.

A fall in the price of crude oil overnight was also US dollar-positive event with investors fretting over potential supply concerns after the Government announced an intention to utilize the Strategic Petroleum Reserve.

The Aussie dollar fell to lows of 104.54 US cents in the ensuing period of the job's release but made an equally as impressive rise in the latter part of US trade on the news Greece's 5-year austerity measures are watertight enough to gain the financial support of the IMF and EU. After falling to lows of US$1.4126 the Euro was also able to claw back gains against the greenback with price action currently testing short-term resistance around 1.4265.