Currency Trading Commentary: February 29
Amid stronger equity markets and mild risk-on sentiment, the Aussie dollar pushed higher overnight.
The Aussie reached a one-week high against the greenback ahead of the ECB beginning its longer-term refinancing operation tonight to help shore up the region’s banks.
The AUDUSD added 0.2% to settle at 1.0771 at this morning’s NY close, whilst the AUDJPY firmed 0.1% to settle at 86.68.
During today’s session the AUDUSD popped higher on the back of solid retail sales data.
Sales rose 0.3% in January following a 0.1% drop in December. The result was in line with expectations but traders have interpreted as lessening the pressure on the RBA to cut rates.
Back to last night’s action, the euro strengthened against the US dollar and yen on speculation a European Central Bank allotment of three-year loans to banks will bolster investor appetite for the region’s assets.
The EURUSD firmed 0.5% to settle at 1.3463 whilst the EURJPY added 0.4% to settle at 108.35.
UK 10-year gilts rose for a sixth consecutive session after S&P cut Greece’s credit rating to selective default, supporting demand for the perceived safety of British debt.
Benchmark gilt yields fell to the lowest in three weeks after a US report showed durable goods orders dropped in January, fuelling speculation the world’s biggest economy is slowing.
The pound subsequently rose toward a three-week high against the US dollar, also helped by climbing retails sales in February. The GBPUSD added 0.5% to settle at 1.3463.
Elsewhere, the Canadian loonie advanced for a second consecutive session, touching the strongest level in a week against the greenback.