AUD/USD: taken lower on ECB shocker

By FXStreet FXStreet (Guatemala) – Despite the Aussie trade balance overnight with a decline in exports m/m and the shorts on the back of Chinese services, AUD/USD was a steady climb from early Tokyo morning after falling below the 0.73 handle for the first time this month. AUD/USD managed a score of 0.7350 in the volatility leading into the ECB shocker.

AUD/USD was first whippy in a tight range on the 0.73 handle with 30-10 pip swings in a volatile market before (FT leak and incorrect information) and after Draghi indeed shocked the markets, but not in the way that might have been anticipated. AUD/USD then made a decisive direction to the downside as the euro rallied, with bears breaking below the 0.73 handle scoring news lows for December at 0.7283.

ECB shocker – broken down

Draghi shocked the market that was looking for a 10-20 basis point cut in the deposit rate and expansions in easing with a dovish and bearish outlook from the press conference in inflation and growth. But that was not exactly delivered.

First of all, the deposit rate was only cut to -0.30% and by just 10 basis points, the lower end of the scale of expectations, and the …read more

Source:: FX Street