The Australian Dollar continued last week to be bogged down in a 4 cent trading range with the low being 0.6414 and the high being 0.6839. With the local data out during the week being basically ignored by many in the know it was left to offshore events and happenings to move the Australian Dollar. With the inauguration of President Barrack Obama last Tuesday and the unveiling of his economic roadmap to get the US and the Global economy back on track, many traders were left waiting for the Obama Bounce. In fact the reaction was quite the opposite with the Dow down almost 4% on Tuesday and other regions following suite. News in the resource sector of further job cuts and a slowing demand by China for Australian Commodities did little to help the local unit.
The Greenback however continues to go from strength to strength against both the EURO and Sterling, however versus the YEN the same story cannot be said. With the Bank of Japan leaving interest rates on hold at 0.10% and the return risk aversion into the market, the Yen was able to claw back some lost ground against the Big Dollar to a high of 87.11. This run maybe short lived however as possible intervention by the Bank of Japan will weigh heavily on this pair as we enter a new week. CABLE took a beating late in the week as figures indicated that Gross Domestic Product fell 1.5% for the past 3 months compared with a forecast of 1.2%. The initial reaction on the release saw the Pound fall to a 23 year low of 1.3503 against the Greenback before some calm returned. All signs continue to point to a deep recession in the UK with the question currently being asked how long will this continue and at what cost to the local economy.