AS PREDICTED last week, the Swiss National Bank (SNB) ould only hold the tide of sell orders in euro-Swiss franc for so long. It finally caved in last Thursday when the currency pair plunged 300 pips in a matter of hours.
The euro showed some strength on Monday, reaching SFr1.4325, but it has dipped again on concerns that the rescue package won’t be enough. Support from the SNB came in at the 1.4050 and 1.4000 levels, so look for these areas to provide support again. Spread Co offers SFr1.4090-SFr1.4097
The Aussie dollar has been the king of the carry trade until recently but indications of a pause in rate hikes has seen it drop against the dollar. Further fiscal tightening in China and falling commodity prices mean we could see further losses unwind as the dollar strengthens. Sell into rallies towards US$0.9080 with a stop above US$0.9150 for a move towards US$0.8800. CMC Markets’ bid-offer spread on Aussie dollar-US dollar is US$0.8972-US$0.8974.
While the focus has been on sterling and the euro, the Kiwi appears to be winning the battle between the high-yielding Aussie and New Zealand dollars. But recent support around NZ$1.2500 could provide a buying opportunity. Capital Spreads offers a price of NZ$1.2452-NZ$1.2464 for Aussie-Kiwi.