Australian dlr gives ground to US $- strong on euro

* Aussie pinned at $0.9135 AUD=, after losing almost a cent on Friday. Support seen at $0.9130 and $0.9095, while resistance put around $0.9170 and last week's $0.9250 high.

* Aussie also loses ground to safe-haven yen, slipping to 82.64 yen AUDJPY= after failing to break past 83.50 last week. * Yet Aussie firm on euro and sterling which have troubles of their own. Euro made a fresh decade low at A$1.4711 EURAUD= on Friday before steadying at $1.4780.

* Market still smarting from Friday's surprise rise in interest rates from India which knocked commodity prices, though many analysts felt the central bank was moving proactively to sustain growth in the long run [ID:nSGE62I0HP].

* Strong demand from India and China has been the driver of rising commodity prices so anything that threatens to cool those economies tends to hurt sentiment.

* India is also a major buyer of Australian commodity exports, so any slackening in demand there could crimp the country's trade account.

* The CRB index .CRB lost 1.1 percent Friday, while oil, gold and copper all declined.

* Investors also uneasy over Greece with EU leaders seemingly at odds over the need for financial support ID:nLDE62K0C9. A summit of leaders on March 25-26 is the next flash point and likely to keep the euro on the defensive.

* Aussie should remain underpinned by expectations of more interest rate rises at home with the market fully priced for a move to 4.25 percent by June 0#YIB:.

* Central bank events later in the week include a speech from Reserve Bank of Australia (RBA) Governor Stevens on Friday, while on Thursday Assistant governor Lowe talks and the bank releases its financial stability review.

* Only domestic data on Monday was vehicle sales for February, which declined by 1.9 percent reflecting the fading impact of discontinued tax breaks for business buyers.

* Still, sales were up 17 percent on February last year and demand for passenger and sports vehicles stabilised.

* Australian bond futures benefited somewhat from the latest bout of risk aversion. Three-year futures YTTc1 were steady at 94.700, while ten-year futures YTCc1 added 0.010 points to 94.310. ... read original article
Mon 22nd March 2010 - 12:32pm