The highly anticipated Swiss National Bank meeting was met with disappointment overnight with the Swiss central bank failing to make reference to either a lower limit for the EURCHF pair or a peg to the Euro. The meeting was widely expected to see the SNB announce stringent measures introduced to combat the rising Swiss franc - instead they announced an expansion of the supply of liquidity to the Swiss money market from CHF120 billion to CHF200 billion. The weakness the Swiss enjoyed prior to the meeting was quickly unwound with the EURCHF pair falling to lows of 1.1219 in the ensuing period, but has since regained some ground to current levels of 1.1390.
The Aussie dollar traded to highs a fraction above 106 US cents before easing lower over the course of US trade in-line with US equities. The local unit continued to outperform its commodity bloc counterparts recording gains against the CAD and Kiwi. The greenback was moderately weaker across the board which provided a platform for commodity strength with metal and energy markets mildly higher. US stocks were mixed in what appeared to be a largely risk-neutral session with the DOW and S&P finishing flat on the day.
From a technical perspective we have a fairly broad window for the local unit to trade in today; gains in local/Asian equity markets should promote strength over the course of the session. We have average weekly wages due for release at 11.30am - any significant deviation to the upside should serve to promote Aussie dollar strength with resistance likely around the 106 US cent levels. We expect the downside to be met with support at 105 US cents. At the time of writing the local unit is buying 105.4 US cents.