The day in Asia was dominated by reports out of the UK's Independent newspaper stating that a group of Gulf Arab states were in secret talks with the likes of China, Japan, France and Russia to replace the US Dollar for the trading of oil. The dollar would be replaced with a new basket currency that would include the Euro, Yuan, Yen and gold. Needless to say, this news spread quickly, adding to the continued woes of the US Dollar that began in New York with a spark in risk appetite. The report cited both Chinese and Arab banking sources who added that the plan could be implemented within nine years.
Traders liked what they heard and continued to buy EUR/USD into Asia, pushing the pair through 1.4710 highs, as comments from the US Fed's NY President Dudley stating that the US was not considering an end to its accommodative monetary policy anytime soon helped grease the wheels of the move. GBP/USD made subtle gains to the tune of 40 pips to a 1.5970 high as another wave of quantitative easing put into action by the BoE helped dampen Cable strength against the reeling Greenback. Spot Gold continued to grind higher on the dollar weakness, hitting a high just over $1020.00, not too distant from the all time high of $1032.35 from March of 2008. USD/JPY skid to levels a hair under the 89.00 figure to register a weekly low.
The other news of the day was from Down Under as the Reserve Bank of Australia surprised the market and boosted its rate by 0.25%, to pull its 3.0% interest rate up from a 49 year lows to 3.25%. Australia was the first G-20 nation to raise interest rates after the onset of the global credit crisis. The market expected the RBA to leave the rate unchanged, and the move sent the AUD/USD skyrocketing from around 0.8750 to a touch higher than 0.8870 which was in fact a new high for 2009. AUD/JPY and AUD/NZD both made gains over one big figure on the release and seemed well supported heading into London.
Traders liked what they heard and continued to buy EUR/USD into Asia, pushing the pair through 1.4710 highs, as comments from the US Fed's NY President Dudley stating that the US was not considering an end to its accommodative monetary policy anytime soon helped grease the wheels of the move. GBP/USD made subtle gains to the tune of 40 pips to a 1.5970 high as another wave of quantitative easing put into action by the BoE helped dampen Cable strength against the reeling Greenback. Spot Gold continued to grind higher on the dollar weakness, hitting a high just over $1020.00, not too distant from the all time high of $1032.35 from March of 2008. USD/JPY skid to levels a hair under the 89.00 figure to register a weekly low.
The other news of the day was from Down Under as the Reserve Bank of Australia surprised the market and boosted its rate by 0.25%, to pull its 3.0% interest rate up from a 49 year lows to 3.25%. Australia was the first G-20 nation to raise interest rates after the onset of the global credit crisis. The market expected the RBA to leave the rate unchanged, and the move sent the AUD/USD skyrocketing from around 0.8750 to a touch higher than 0.8870 which was in fact a new high for 2009. AUD/JPY and AUD/NZD both made gains over one big figure on the release and seemed well supported heading into London.
