Daily Forex Analysis by Finexo.com 17/12/2009


The Australian Dollar retreated on Wednesday after news emerged that Australia posted a very disappointing GDP number in the third quarter. To add insult to injury, the previous quarter’s growth figures, which were applauded as a terrific sign of growth for the Down Under economy making it the first to emerge from the recession, were also downgraded by .2% making the Aussie GDP flat for the second quarter. The disappointment was evident as Australia has widely been seen as the champion of the global recovery; however the new figures along with the revised ones caused the Aussie to turn bearish literally overnight. Expectations for an interest rate hike have now been dimmed and the markets await the Reserve Bank of Australia’s comments to clarify and explain where they go from here.

At 12:45AM GMT, the Australian Dollar was trading down .71% to the Canadian Dollar to .9547, down .62% against the Japanese Yen to 80.76, down .58% to the New Zealand Dollar to 1.2486, down .83% versus the Euro to 1.6167 and down .53% against the US Dollar to .9012. The Aussie did fall below .90 against the Greenback several times during the session and trends at this time were pointing lower.


The Federal Open Market Committee which is the policy board for the Federal Reserve concluded their two day meeting Wednesday and, as expected, left interest rates unchanged. However, it was their steadfastness against the possibility of a rate hike in the near future that caught investors by surprise. Traders were hoping that as a result of inflationary signals such as consistently higher producer prices, 10% unemployment and falling consumer sentiment, the Fed would have been forced to at least entertain the possibility of raising rates. The market will have to wait until February, barring any public comments from Fed insiders, to see if the US’s Central Bank will yield and begin setting time-tables for raising rates that are currently near zero.
At 12:55AM GMT, the US Dollar was trading up .43% to the Euro to 1.453, up .3% to the Japanese Yen to 89.79, up .09% against the Sterling to 1.6237, up .12%versus the Canadian Dollar to 1.0613 and up .01% to the Swiss Franc to 1.0384

Chart: USD/JPY

The Ichimoku cloud is approaching once again to the upside in the USD/JPY. This has been a key stumbling block for the pair’s rallies for some time. The disappointing news from the Federal Open Market Committee could provide a stumbling block for a move through the cloud as the Fed seems firm in their resolve to keep interest rates as they are for a while.


Written by Finexo.com