Currency Update June 7

The euro and sterling was largely volatile between major support and resistance levels. The ECB decision to hike rates and a dovish statement was as expected and this did not shake markets. The sterling which initially went up as the rumors spread of a strong possibility of a BoE rate hike mellowed down when it hit the resistance of 1.9970. But the major action was in the antipodes where the Australian dollar hit a fresh 17-year high as data showed a surge in economic growth in the first quarter. But the RBA as expected left interest rates on hold at 6.25. But on the other side of the Tasman Sea the New Zealand central bank surprised the markets by hiking rates. On one side carry currencies like AUD and NZD was performing well, the yen was appreciating as developed market carry unwound on earnest of a major stock market collapse world wide. (Yen close NY: 121.03)