FX Views
AUDUSD
Seems AUD has some bouancy off the 98.09 area. I would attribute this to the better risk appetite as can also be seen in the EurUsd which has climbed back above the 1.30 level.
The floods/rain some say are supposed to peak by tomorrow-Thursday, and this gives AUD the boost as well.
The question is whether the floods will lead to a lower economic output. Bear in mind that there is considerable damage to the coal infrastructure and it makes sense to quickly pump in money to rebuild and quickly. This may give the economy the booster it needs after this dip. Keynesian theorists would probably subscribe to this and thus won't be so bearish on the AUD.
The higher coal prices is also supportive of the AUD from the lack of supply.
My main worry is China and it"s cooling measures to reign in inflation. If the continue to curb credit, this will affect economic growth to a X percent. That will make AUD weaker- perhaps not now but something investors would want to take note of. We need to monitor this closely.
Overal short term is slightly bid for the AUD on the bounce off 98 but keep tight stop losses until the impact of the floods is clearer.
Support: 98.00 Resistance: 1.0250

EURUSD
Risk is being taken on as we approach the auctions of the Porugese, Spanish bonds.
That is a stabilizing sign and may bring EurUsd on a firmer footing to test 1.32 area unless a shock is produced.
I would trade tightly with near stops but bearing in mind I would still consider keeping short as 1.33-1,34 approaches.

Support: 1.2930 Resistance 1-3280