A choppy night of trading saw AUD/USD finish the session up 0.2% at 1.0282. Risk initially turned lower after headlines about Germany balking at combining rescue funds, plus saying that IMF aid will not be decided at this summit.
Markets moved lower due to the fading of expectations for decisive action emanating from the EU Summit. A final Nikkei story saying the G20 is considering the IMF lending program for Europe lifted risk currencies at the end of the session. AUD/USD traded to 1.0305 before easing to 1.0285 when the IMF denied the report. Some analysts say there is suspicion in the investment community that Germany is purposely trying to lower expectations so that when there are announcements of decisive breakthroughs on Friday, the markets will react enthusiastically.
AUD/USD has taken a beating this morning after Australia’s jobs numbers missed expectations. AUD/USD has just tested 1.024 after having rejected 1.03. The pair might start to find some support in this region.