The euro plummeted below the 1.31 level against the US dollar after data showed the US labor sector created more than expected jobs in February. The pair dipped to a one-month low at 1.3087 from 1.3290, a 1.5% decline. Today, Asian shares turned negative on risk aversion and on concerns over China’s economic growth. Figures revealed that China’s trade balance showed the largest deficit in at least a decade raising expectations that China may cut the reserve requirement ratio for banks in order to stimulate domestic demand. Optimism following the Greek debt deal started to fade on concerns over the eurozone economic growth and Portugal’s debt situation.

The US dollar strengthened after Friday’s Non Farm Payrolls report. The figures showed an unexpected increase of 227 thousand new jobs last month signaling that the US economy is recovering. The unemployment rate stayed unchanged at 8.3%. This is the third straight month of solid jobs growth and expectations for another round of quantitative easing start to fade. Focus now turns to the Federal Reserve monetary policy on Tuesday where no change in the policy stance is expected. Versus the Japanese yen, the greenback jumped as high as 82.64 from 81.46 on Friday and all eyes now turn to the Bank of Japan monetary policy on Tuesday. During BoJ’s last policy meeting the central bank surprised the markets after a decision for monetary easing through asset purchases triggering a slide in the yen.

The Australian dollar dropped versus the US dollar to 1.0517 from 1.0663. The Aussie is weighed by a strong dollar and China’s trade deficit, Australia’s largest trade partner.

Oil rose to 108.18 dollars a barrel from 106.12. Gold rose to 1716.06 dollars an ounce from 1677.03. Gold edged higher to 1307.55 euro an ounce from 1277.93. Silver jumped to 34.38 dollars an ounce from 33.11.

 

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Outlook.PivotPreference1Sentiment2
.EURUSD1.3125SHORT @ 1.312056% of deals buy EUR
.USDJPY81.90LONG @ 81.9029% of deals buy USD
.GBPUSD1.5725SHORT @ 1.571566% of deals buy GBP
.AUDUSD1.0585SHORT @ 1.058560% of deals buy AUD
.GOLD1696.00LONG @ 1696.0078% of deals buy GOLD
.OIL106.15LONG @ 106.1547% of deals buy OIL

1
data generated by Trading Central, 2 data obtained from easy-forex Inside Viewer
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CalendarCurrencyTime (GMT)EventForecast
USD18:00Monthly Budget Statement-229B
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Movers Shakers
USDNOK
The US dollar (USD) produced a spectacular rebound against the Norwegian krone (NOK) rising as high as 5.7233 on Monday. The pair appreciated by 1962 pips, and thus recorded a weekly return of 3.5%. Friday’s close was at 5.6959, and the next resistance level is at 5.7238. What is interesting to see is whether there will be a reversal of the trend.