The Australian dollar suffered a strong downward correction today, most considerably against the US dollar. The move came after China announced it would lower the level at which the yuan trades against the greenback.
EUR/USD had another choppy session but on the short time frames the market was veering towards the bullish side. EUR/USD remained above the 1.09 level for most of the session – support is forming around 1.0876 and resistance at 1.0937.
The greenback traded on relatively solid ground today despite a mixed set of economic data. The dollar was up against the yen and the euro but slipped versus the UK pound and fell sharply against the Canadian dollar.
Commodities took another beating today after China’s main stock index the Shanghai Composite plunged by 8.5%. The Chinese authorities have staged a massive intervention in recent months to try to stabilize the stock market.
Commodity currencies were trading nervously in the run up to an announcement from the RBNZ’s monetary policy committee. New Zealand’s reserve bank is widely expected to lower rates by 25bp to 3.0% today.