The first day back from the Easter holiday was a harsh one indeed for the European Currency, as the ugly specter of Greece once again reared its head and had traders hitting bids against the dollar and the yen. The new wave of negative sentiment towards Greece was born from a few factors, including Greece looking to get out from potentially harsh IMF aid conditions and Germany looking for higher rates on proposed financial aid. Added to the mix was the fact that Greek citizens were quickly pulling money from banks in order to protect their money in safer investments, translated, that means “offshore” investments.
EUR/USD took a nose dive in Asia, dropping from 1.3495 to late day lows of 1.3415. EUR/JPY did the same, as it slipped from early 127.30 highs to lows just near the 126.05 mark. Yen crosses were in for the ride as the news from Greece dampened risk appetite, GBP/JPY perhaps witnessed the largest move of the session with a 145 pip drop to 142.95 lows, and as well, GBP/USD fell to 1.5210 after being closer to 1.5305 at the session start. The moves were noticeably one way today with the exception of the Aussie dollar.
The AUD/USD was on the same path as most other risk pairs as it skid from 0.9215 to 91.65 with the RBA rate decision on deck. Most traders anticipated a 0.25% hike to 4.25%, but that sentiment seemed to wane heading into the number as an increased number of traders felt the rate could be left unchanged. Lo and behold, the RBA did hike 0.25% to 4.25% as expected, and the AUD/USD rocketed off of session lows to notch new highs just over the 0.9225 level. This was the fifth hike by the RBA since October of 2009. Tomorrow we will continue with central bank rate decisions as the BOJ will be on deck and likely hold their rate at the current 0.10% level.