Australian Dollar: The AUD/USD roared higher on Friday night to break above the psychological 85 cent level for the first time since September last year. The rally came on the back of increasing risk appetite following a better than expected U.S non-farm payroll number, a clear sign of continued improvement in the jobs market stateside. The bullish sentiment towards the Aussie dollar comes on the back of last week's strong Australian economic growth data and ahead of today's August job advertisements which is likely to set the tone for this Thursday's local employment report. With the market pricing in an interest rate rise this year, more positive data will see more aggressive hikes forecast and as a consequence continued up side in the AUD this week.

- We expect a range today in the AUD/USD rate of 0.8475 to 0.8550

Great Britain Pound: With only second tier U.K data in the form of new car registrations released the GBP/USD followed a similar path as the EUR/USD on Friday dipping to 1.6285 only to rally back towards 1.6400 following the U.S economic data. Risk sentiment improved despite an increase in the official U.S unemployment rate to its highest levels since 1983, perilously close to double digits, as it appears this trend is nearing an end. The Pound Sterling however continues to underperform against the Australian dollar dropping to 1.9220 following a massive rally in the AUD/USD.

- We expect a range today in the GBP/AUD rate of 1.9180 to 1.9280

New Zealand Dollar: The recent uptrend in the Kiwi dollar continued heading into the weekend holding onto support at 0.6780 in Asia on Friday to open marginally higher around the 68 cent level in Europe. With the IMF upgrading global growth forecasts and U.S payroll data surprising to the upside demand for the high yielding AUD and NZD continued throughout the offshore session. The Kiwi revisited critical longer term resistance at the psychological 69 cent barrier with a clear break through appearing inevitable at some point. This morning sees the NZD/USD open at 0.6880 ahead of August QV House Price data with most analysts expecting some improvement from the previous months 5% fall.

- We expect a range today in the NZD/USD rate of 0.6850 to 0.6930

Majors: As anticipated the U.S employment report sparked the markets to life on Friday with the volatility increasing dramatically during the offshore session. Economists had forecast a loss of around 230 thousand jobs in the non-farm sector during the month of August however the better than expected 213k figure gave the markets some confidence. EUR/USD bounced back from a test of downside technical support around 1.4200 to post a high of 1.4325 after the data. Adding support to the rally was an upgrade in global growth forecasts from 2.5% to 2.9% by the IMF. Tempering any further upside however was a larger than forecast rise in the official headline unemployment rate from 9.4% to a higher than anticipated 9.7%, the highest since 1983. The big dollar gained only modest ground against the Japanese Yen climbing from 92.50 in late Asia only to run into strong resistance above 93.

Data Releases:

  • AUD: Aug ANZ Job Advertisements
  • NZD: Aug QV House Prices
  • USD: U.S Labour Day Holiday
  • GBP: No Data Expected today
  • EUR: Jul German Factory Orders
  • JPY: No Data Expected today
  • CAD: Canadian Labour Day Holiday

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