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The RBA lowered the interest key rate by 0.25% to 3.00 % which is the lowest level since 2009

December 5, 2012, Wednesday, 11:47 GMT | 06:47 EST | 16:17 IST | 18:47 SGT
Contributed by Forex-Metal

Asian and European trading sessions:

Euro: The EUR / USD pair traded in narrow range of $ 1.3045-64 during the Asian session. On the following session the currency was supported by expectations that the Fed will continue its monthly bond purchases program namely Operation Twist. The EUR / USD pair steadily grew to the level of almost $1.3100 as markets were optimistic about those expectations. Also, today's report showed that euro zone’s producer prices rose by 0.1 % in monthly term and 2.6% in yearly, which was higher than forecasts of 0.0 % and 2.5 %. As the result, there were more market participants who entered in long positions on the EUR / USD pair.

British Pound: The Purchasing Manager Index Manufacturing of UK showed growth by 1.9 points in November beating the forecasts of analysts, who expected increase only by 0.7 points to 48. The GBP / USD pair reacted positively on this news moving up to $ 1.6125 during the European session.

Swiss franc: On expectations that other banks will join the yesterday’s decision of the Credit Suisse Group AG of charging interest for holding deposits in francs, the Swiss franc fell to 11-week low against the euro.

Australian dollar: The Australian dollar rose, despite the decision of the RBA to lower the interest key rate by 25 basis points (0.25%) to 3.00 % which is the lowest level since 2009. This entire trend was caused by the fact that some of analysts predicted that the rate would be reduced by 0.5 %. The central bank mentioned in its decision that the slowdown in hiring and a high rate of the National still negatively affect the manufacturing and tourism sector.

American trading session:

Euro: After Greece announced a better-than -expected conditions for buying out its debt thus affirmed its willingness on continuation for receiving the international assistance and avoiding a possible default, the euro approached today to the new high of 1.3007 levels against the dollar.

U.S. Dollar: The dollar index fell today by 0.25% to 79.57 on concerns about "financial cliff” in the U.S, which strangely affected the dynamics of the U.S. dollar today. Usually, the currency acts as a safe haven asset in times of uncertainty.

Gold: The Gold prices fell today and reached the lowest point in the current month. The asset dropped by more than 1% amid uncertainty in the negotiations related to the problem namely "fiscal cliff." The December futures price of gold sunk down on the COMEX to the $1690.70 per troy ounce level, breaking important support of $1700 level.

Oil: The price of oil futures rebounded today from the low of $87.90 per barrel level which confirmed 1% down fall today as concerns about the economy in general returned oil back into its latest trading range. The January futures price of WTI closed at 88.40 dollars per barrel on the NYMEX.