Strong support from the stock market, AUD/USD recovers after falling interest rate cuts

On Tuesday (December 6th), Standard & Poor's listed the long-term EFSF rating on the negative watch list. The market was under pressure for a short time. However, the market is still optimistic about the measures adopted by the Friday summit to curb the crisis. The US stock market is relatively strong and the commodity currency Australian dollar is affected. The support shocks climbed and recovered Asian markets’ decline due to interest rate cuts.

In the Asian morning, the Reserve Bank of Australia (RBA) announced a rate cut of 25 basis points to 4.25 per cent as economies such as the world and China are slowing down, while Europe’s debt problems hurt Asian trade. The Fed said that it is expected that the global economic growth will further slow down, commodity prices will further decline, ease the inflationary pressures facing the country, and its inflation may meet the target in 2012 and 2013, and there is room for a moderate rate cut in future policies. Australian dollar exchange rate against the US dollar continued to fall from the 1.0230 level and hit a low of 1.0150.

Since the two countries have already reached an initial consensus on the amendment of the EU Treaty, the EU also vowed to declare that this week will be an “important decision” and that market sentiment has thus eased slightly, boosting European stock markets to rebound after a sharp drop and supporting the Australian dollar. The dollar has steadily rebounded to 1.0250 level against the US dollar.

In early morning New York, rating agency Standard & Poor's renewed its turmoil, adding the long-term AAA rating of the European Financial Stability Fund (EFSF) to the negative watch list, and may cut the EFSF long-term rating by one or two levels, but reiterated the short-term rating of EFSF “A1+”. constant. Affected by this news, European and American stock markets fell across the board, which put pressure on market risk appetite and pressured the Australian dollar against the US dollar to fall again. However, the US stock market was relatively firm and the Australian dollar was supported.

On the daily chart, the Australian dollar/dollar can not break through the 100-day moving average and has run out of risk. In the short-term, however, the exchange rate closed at 50% of the golden line forecast that the short-term will rebound slightly.

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