Australian Dollar surges broadly today and even over-powers other commodity currencies. Surging iron ore prices are seen as a factor driving the moves. Iron ore entered a stage of parabolic rally after authorities at Pilbara Ports, the world’s largest iron ore export terminal, issued a cyclone warning, exacerbating an already tight market.
AUD/NZD’s strong rebound now argues that corrective fall from 1.1043 might have completed at 1.0418, just ahead of 61.8% retracement of 0.9994 to 1.1043 at 1.0395. Break of 55 day EMA is a bullishness and further rise is expected as long as 1.0568 support holds. Focus is now on key resistance at 38.2% retracement of 1.1043 to 1.0418 at 1.0657. Decisive break there will firm affirm near term bullish reversal and target 61.8% retracement at 1.0804 and above.
AUD/CAD’s break of 0.9617 resistance also indicates resumption of rebound from 0.9247. It’s possibly that rise from 0.8066 is resuming too. But AUD/CAD would need to take out 0.9696 high to confirm. In the case, next upside target is 38.2% projection of 0.8066 to 0.9696 from 0.9247 at 0.9870. Break of 0.9456 support would extend the consolidation form 0.9696 with another falling leg instead.
ECB Villeroy: Aim of PEPP is not to invest a certain amount each month
ECB Governing Council member Francois Villeroy de Galhau told BFM Business radio the aim of the Pandemic Emergency Purchase Programme (PEPP) was not “to invest a certain amount each month, but rather a result”. “We will do less if the financing conditions remain favorable like today. If the opposite is needed, we will do more,” he said.
ECB announced yesterday to raise the envelop of the PEPP by EUR 500B, and extend the program by 9 months through March 2022.
Villeroy also reiterated that “we do not have an exchange rate target … but we have a strong vigilance about the effects of the exchange rate on inflation. We are ready as a result of this vigilance to use all our instruments.”