AUD/USD opens higher after China lowers reserve ratio

AUD/USD opened with a gap higher on Monday at $0.7826 compared to Friday’s close at $0.7781 and then held above 0.7800. The aussie reacted to news that Australia’s largest trading partner – China – cut banks’ reserve requirements. To stimulate more growth, the People’s Bank of China – cut the reserve requirement ratio (RRR) for all banks by 100 basis points to 18.5%. This was more-than-expected.

USD/JPY consolidated in thin Asia trading, in thin volumes. With little news or data to trade off of, the Nikkei was down at open but back up later, helping support the pair. The low of 118.56 comes into view as the pair remains heavy.

EUR/USD opened up in Asia at 1.0819 from 1.0803 at Friday’s New York close. The pair drifted lower to 1.0768. It remains to be seen how the euro will perform after ECB Chief Mario Draghi said it was pointless to short the euro. The latest chapter in Greek debt saga was shrugged off by the markets for now as Greece’s next debt payment deadlines loom.

GBP/USD traded in tight 1.4936-82 range in Asia, with light volumes. There was consolidation into the European open after a rally to 1.5053 on Friday.

EUR/GBP was off from 0.7235 to 0.7204.

USD/CHF was quiet in Asia, stuck in a range of 0.9505-33 while EUR/CHF was steady between 1.0283-1.0300.

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