After an initial burst of energy on the back of Greece’s bailout plan the Aussie dollar has fallen back through 93 US cents currently buying 92.6 US cents. Despite moderate gains in US equity markets, the Aussie wasn’t able to maintain the momentum seen in recent days, retracing from yesterday’s highs of 93.8 US cents on dovish comments by RBA assistant governor Guy Debelle, which the market perceived as a possible indication interest rates are closer to ‘normal’ levels than first thought.
Yesterday’s sugar hit surrounding the joint effort by the European nations and the International Monetary Fund appears to have lost steam with the US dollar regaining composure against major counterpart. Greece intends to auction a 1.2 billion euros ($A1.73 billion) package in treasury bills on Tuesday and also some talk Greece intends to head to the states to sell bonds worth between five and ten billion dollars.
In a speech last week, European Central Bank Chairman Jean Claude Trichet reassured the investing public “a default in not an issue for Greece” and also threw his support behind the Austerity measures Greece is taking to rein in the budget deficit.
Local economic news this morning includes the National Australia Bank Business conditions and business confidence data. From a technical perspective key support can be seen around the low 92.20’s US cents however we expect the Aussie to see moderate support in domestic trade after last night’s sell off, with equity market movements the key barometer.