Economist Shayne Heffernan takes a look at the currency trading live from Asia.

The euro started trade on Wednesday slightly on the back foot after Spain dented hopes that it would soon ask for help , while the Australian dollar fell on prospects of more domestic interest rate cuts following Tuesday’s easing.

The pullback in the euro saw the dollar index edge off a session low of 79.479. It was last down 0.1 % at 79.748 At the moment, the EUR/USD is down 0.17% at 1.2897 with the next support at 1.2915 (MA200h) followed by 1.2822 (MA200d) then 1.2804 (low Oct.1) and 1.2784 (MA30d).

On the upside, a breakout of 1.2968 (high Oct.2) would expose 1.3059 (high Sep.20) then 1.3120 (high Sep.18) and 1.3173 (high Sep.17).

RBA Seen Cutting Rates to Lowest in 53 Years: Australia Credit

Australia’s central bank will reduce its benchmark interest rate to the lowest in the body’s 53-year history, according to credit markets that more accurately picked yesterday’s cut than economists. Traders are pricing in an 80 % chance the overnight cash-rate target will be 2.75 % or less by Feb. 5,

As Shayne Heffernan of predicted the Aussie is heading back to parity AUD/USD’s fall from 1.0624 accelerates to as low as 1.0211 so far today. Intraday bias remains on the downside for 1.0165 support. Break will clear the near term outlook and should confirm that whole rebound from 0.9588 is finished. That is deeper decline should then be seen back to parity and below. On the upside, above 1.0328 minor resistance will, on the other hand, indicates that recent sideway trading is not finished yet and will keep near term outlook neutral.

In the bigger picture, price actions from 1.1079 high are treated as a consolidation pattern in the larger up trend, in form of a triangle. Such consolidation should be near to completion even though it’s uncertain whether it’s finished at 1.0165 yet. After all, break of 1.0852 resistance will indicate that the larger up trend is resuming and would pave the way to another high above 1.1079. On the downside, any decline should be contained well above 0.9588 key support level.

Canadian Dollar Weakens Versus Most Peers as Oil Erases Gains

The Canadian dollar fell against most of its major counterparts as crude oil, the nation’s largest export, and stocks erased gains amid reduced demand for riskier assets. CAD weakened against the U.S. dollar as Spanish Prime Minister Mariano Rajoy said a request for help funds isn’t imminent before the ECB meets Oct. 4.

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Bernanke Seeks Gains for Equities in Push for Jobs: Economy

Chairman Ben S. Bernanke is increasingly aiming for gains in stock prices as the Federal Reserve reaches for new tools to spur the three-year recovery and reduce unemployment stuck above 8 %. Bernanke, setting the stage for a third round of quantitative easing in an Aug. 31 speech in Jackson Hole, Wyoming,

Europe, Africa, Mideast

Pound Snaps 2-Day Drop Versus Dollar After Construction Report

The pound strengthened against the dollar, snapping a two-day drop, as a report showed an index of U.K. construction contracted at a slower pace in September. Gilts advanced, erasing an earlier decline, after borrowing costs fell at a sale of 3.5 billion pounds ($5.7 billion) of 10- year securities.

Portugal Offers to Exchange Bonds as It Seeks Debt Market Access

Portuguese debt agency IGCP will offer to exchange bonds due next year for securities maturing in three years as it tries to regain access to long-term debt markets. The government debt agency will offer to buy bonds maturing in September 2013 and will sell bonds maturing in October 2015, the Lisbon-based IGCP said yesterday.

European Bank Capital Results Overtaken by Tougher Global Rules

The Europe Union’s top bank regulator will release figures today detailing how lenders met a 114.7 billion-euro ($148.5 billion) capital target, as the bloc is criticized for failing to properly implement tougher global standards. European banks boosted their capital reserves by 94.4 billion euros by a June deadline, the European Banking Authority has said in July.

China Non-Manufacturing Index Falls as Economic Growth Cools

China’s non-manufacturing industries expanded at the weakest pace since at least March 2011 as officials struggle to reverse a slowdown . The PMI index fell to 53.7 from 56.3 in August, the National Bureau of Statistics said in Beijing today.

Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reached a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.Read the Terms of Service

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