The Reserve Bank of Australia cut its benchmark interest rate to the lowest level since 2009 to revive demand outside of a mining boom it expects may crest at a lower level than previously forecast. Governor Glenn Stevens and his board lowered the overnight cash-rate target by a quarter percentage point to 3.25 percent, the central bank said in a statement in Sydney today.
Headlines came in the market late in the US session yesterday, that Spain is finally prepared to bite the bullet and request a Euro zone bailout this coming weekend, however, the possible request is facing opposition from Germany now, recommending the Iberian country to hold out any external aid, according to an unnamed European officials cited by Reuters.
EUR/USD: The EUR/USD was trading higher at 1.29122 at the time of writing after mixed economic data were released in the U.S yesterday and on speculation that the signs of weakness in U.S. employment will encourage the Federal Reserve to sustain monetary stimulus that tends to debase the currency. Investor should remain cautious as there might be market corrections intra trade as data forecast to show retail sales in the Eurozone decreased for a second month and ahead of an Oct. 4 meeting of the European Central Bank. Moreover, Spain will release its Unemployment change data which might weigh on the pair. Investors will have to watch all the headlines regarding the progress on the Spanish bailout and latest review of Spain's sovereign rating, by Moody's rating agency, which may see it downgraded to junk status. While no major events is expected in the U.S today. A report tomorrow from ADP Employer Services will probably show U.S. companies hired 140,000 workers in September, versus 201,000 in August, according to the median estimate of economists in a Bloomberg News survey. In addition, the Fed will release on Oct. 4 minutes of its Sept. 13 meeting when it announced that it will buy $40 billion of mortgage bonds a month. The central bank will continue record stimulus even after economic expansion gains strength, Bernanke said yesterday in Indianapolis. Investors should wait for some news to come on market to better assess the movement of the pair. The resistance level is at 1.29604 and the support level is at 1.28351.
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