:: Australian Dollar: Financial markets appeared stunned by yesterday's Australian employment report with many analysts now tipping another interest rate rise. The majority of economists forecast the economy to have added around 15k jobs in January with headline unemployment hovering around 5.6% for the month however with 52.7k jobs added and unemployment dropping from 5.5% to 5.3% the Aussie gapped higher. Heading into the announcement AUD/USD was exchanging around 0.8770 and within minutes had added over 1% to exchange around 0.8860. It spent the majority of the Asian afternoon and European morning edging higher before hovering around 0.8885. It finally pushed through stubborn resistance at 89 cents during late U.S trade following some better than expected jobless claims data and a rally in North American equity markets. Resistance between 89 and 90 cents is expected to slow the pace of the gains with offshore investors keenly watching developments in Europe for further direction in risk appetite.
- We expect a range today in the AUD/USD rate of 0.8850 to 0.8925
:: Great Britain Pound: The National Institute of Economic Research in the U.K released its estimate of GDP for January predicting a 0.4% increase in economic growth. The news gave the GBP/USD a much needed boost as it recovered from its lows below 1.5600 to post a late New York high of 1.5717 to open this morning at 1.5690. With no U.K data scheduled for release on Friday direction for the Pound Sterling is expected to come from developments across the Euro-zone with a plethora of economic data scheduled and more comments from EU officials expected over the weekend. With the Aussie dollar stalling around the 89 cent level and the Cable rallying the cross rate jumped from its overnight lows near 1.7500 to open this morning around 1.7620.
- We expect a range today in the GBP/AUD rate of 1.7550 to 1.7750
:: New Zealand Dollar: The Kiwi rallied hard from its lows around 0.6920 in Asia yesterday following a sharp rise in N.Z Food prices and a rally in the Aussie dollar. After entering offshore exchanging at 0.6980 resistance around 70 cents was momentarily breached before a slide back to 0.6950 in early North American trade. Weekly jobless claims out of the U.S beat expectations helping the Dow Jones Industrial higher by over 1% and subsequently fuelling another increase for the NZD/USD. This morning sees the Kiwi open near its highs on 70 cents ahead of what will be a keenly anticipated December Retail Sales reports out of both N.Z and the U.S.
- We expect a range today in the NZD/USD rate of 0.6935 to 0.7050
:: Majors: Economic data in the form of a 1.3% rise in German Wholesale prices overnight was once again overshadowed by comments from EU officials relating to sovereign debt issues. Despite more rhetoric supporting Greece, this time coming from Germany who had previously been somewhat reluctant to comment, the market was disappointed more concrete measures have not yet been agreed upon. As a result the Euro weakened from its late Asian highs around 1.3800 to momentarily exchange below 1.3600 in early U.S exchange. Fewer than expected weekly jobless claims out of North America helped boost equity markets and risk sentiment late in the session taking EUR/USD back towards 1.3700. Whilst the debate about Greece, Portugal and Spain is expected to continue this evening and over the weekend investors will also be eyeing critical data in the form of U.S Retail Sales for the month of January to gauge consumers appetite for spending along with the University of Michigan's preliminary reading on consumer sentiment for February. USD/JPY failed to consolidate above the psychological 90 handle dipping to 89.60 overnight and opening this morning around 89.70 with Japanese Consumer Confidence data scheduled for release in Asia today.
:: Data Releases:
- AUD: No Data Expected
- NZD: Dec Retail Sales & Jan REINZ House Sales
- USD: Jan Advance Retail Sales & Uni of Michigan Confidence (Feb Prelim)
- GBP: No Data Expected
- EUR: Q4 Prelim GDP & Dec Industrial Production
- JPY: Jan Consumer Confidence