AUD/USD drops then rises after RBA policy announcement

Posted On 05 May 2015

AUD/USD opened Tuesday 0.7837 and traded between 0.7787-0.7910. The aussie was slightly bid pre- RBA decision. It rose to as high as 0.7855 just prior to the rate announcement and then spiked down sharply on the rate cut decision by 25 basis points to a record low 2%. AUD/USD touched as low as 0.7787 then reversed suddenly higher to 0.7910 as the RBA comments were viewed as neutral and appeared to remove the easing bias.

EUR/USD opened Asia 1.1149 after easing during the US session on Greece concerns. The pair traded a 1.1124/51 range in Asia. There were media reports saying that the IMF was taking hard line to have lenders write down Greek debt.

USD/JPY opened Asia at 120.15 after flat-lining 120.00/28 all of Monday. Asia was a complete non-event with the Tokyo holiday and it traded 120.07/20. Trading volumes were light with the attention on AUD/USD before and after RBA decision. With Tokyo away again tomorrow only a broad USD move will push USD/JPY. For now the rising US Treasury yields should also underpin the USD/JPY.

GBP/USD traded a tight range in Asia between 1.5110/28 consolidating losses after extending lower yesterday. Construction PMI leads data risk later in the European session today. Meanwhile, UK elections on Thursday are weighing on the pound. Labour and Conservatives are neck according to a You Gov poll.

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