CANBERA (dpa-AFX) - Analysts at Westpac noted on Friday that the lackluster Greek bailout news and the RBA statement sent the Australian dollar on track for its worst day since 5 January. The firm noted that Asian currencies remain a buy on dips and expect better entry levels as the Asia Dollar Index is trading above its 200-day moving average levels at 117.25.
Besides, risk sentiment also took a hit from Australia & New Zealand Banking Group Ltd.'s decision to hike variable interest rates by 6 basis point and a fall in Asia-pacific equities despite a fairly encouraging trade data from China. The firm does not view the import data as positive, given the Chinese New Year holidays.
AUD/USD fell below 1.07 as the Reserve Bank of Australia revised its 2012 GDP down to 3.5 percent from its previous estimate of 4 percent. NZD/USD pair was also affected by these negative factors, falling as low as 0.8294 from a mid-session high of 0.8343.
EUR/USD reached as low as 1.3252 as little attention was paid to the Greek headlines. USD/JPY was trading in a tight range of 77.52 and 77.75 amid continued chatter on intervention from the Japanese Finance Minister Jun Azumi.
The firm is of the view that the short squeeze in USD/Asia has continued owing to the fact that much of the good news about the likely Greek bailout deal is now reflected in asset market pricing. The research group also pointed out that more positive news flow is needed to continue this momentum, although they expect easing of risk-appetite in the near-term.
The 1-Month USD/IDR Non Deliverable Forward rose almost 1 percent to 9060 on concerns that the Bank of Indonesia's interest rate cutting seems a policy error.
Although the USD/CNY fix came in lower than expected, the broader USD/Asia sentiment helped the 12-Month USD/CNY Non Deliverable Forward above 6.2700.
The 1-Month USD/PHP rose to 42.50 as Philippine export data was weaker than expected. The 1-Month USD/KRW Non Deliverable Forward rose above the 1126.00 level.
MYR and SGD are down around 0.60 percent against the USD, hitting 3.0385 and 1.2560 respectively. The firm noted that both currencies are retracing as they have traded strongly against the USD since the beginning of the year.
The 1-Month USD/INR Non Deliverable Forward is trading back above 50.0. The firm is of the view that the domestic trade deficit remains quite large and the rupee's momentum has started waning after strong rallies since the start of the year.
Copyright RTT News/dpa-AFX
© 2012 AFX News
