Need To Know News

‘Priorities for TARP’

1. Banks and Non-Banks may need to boost capital to cover losses. TSY developing ‘additional capital strategies’ and examining impact of first capital program
2. TSY will continue to develop foreclosure mitigation strategies, streamlined loan modification strategies
3. TSY is also considering potential new TARP program

(priorities contained no provisions to ensure banks use TARP funds for loans)

AUD/USD is relatively stable in the mid 0.64’s and deep inside the recent trading range. Except for the usual intra-day price chop there is little to report on Aussie, with medium fundamentals still only having a minimal impact on price action. Aussie traded at lower levels in the European morning and rechallenged 0.6400 during early N.Y. trade, but has bounced smartly as the dollar moved broadly lower. Position adjustment was behind the move, with intra-day shorts disappointed that a break below 0.6400 evaporated. Equity markets are mildly softer, which would usually offer encouragement to shorts, but the market is struggling for direction ahead of Friday’s U.S. NFP, which should mean more consolidation to come for AUD/USD. Offers are likely to cap from 0.6500-20 and towards 0.6550, while on the downside 0.6330-50 remains the key area for a break of range.