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Range bound - what's going on in finance and currency

20 April 2015

In this week’s currency update Rob notes that FX markets have been range-bound as traders focussed on a number of themes including weak China growth, soft US data and the perilous state of Greek finances. We saw a dramatic flight to quality that has driven 80% of German government bonds 45% of outstanding eurozone debt to negative yields. The A$ has been range-bound this week too. Weak iron ore prices and concerns ahead of Chinese data saw a low of 0.7553 on Monday; Much better than expected Australian employment data saw the A$ trade as high as 0.7822. We think this range trade continues next week as RBA Governor Stevens speaks in NY on Monday; the RBA minutes are released Tuesday; CPI is reported on Wednesday and the flash China PMI is out on Thursday. These are all factors that we can talk about in next week’s currency update.

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