GO Markets - FX Market Commentary

By IBTimes Staff Reporter | January 06 2010 6:45 PM

A surge in commodities, metals and energies forced the greenback southbound overnight, with a seemingly dovish economic outlook in the FOMC minutes keeping the Dollar on the downward trajectory. The US dollar index which measures the dollar's value relative to six major foreign currencies fell 0.2 per cent to 77.47.

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Economic indicators overnight saw the ADP Employment Change showed a cut of 84,000 jobs for the month of December against a predicted cut of 75,000 jobs, noteably this represents the smallest drop since March 2008. Earlier this week saw more positive jobs data from the US with new applicants for unemployment benefits falling to 432,000 for the week of December 26th, representing the lowest recorded since July 2008. The latest positivity on the jobs front could be seen as a precursor to Friday's Non-Farm payrolls which is predicated to show a drop in 1,000 payrolls, representing the smallest drop in 2 years. Overnight also saw the ISM Non-Manufacturing business conditions indicator for December came in at 50.1 falling short of the expected 50.5 - a reading above 50 indicates economic expansion.

Commodity currencies such as the Aussie, NZD and CAD are certainly in favour at the moment given the latest burst of energy from key commodities which may prove to be - at the very least - the stabilising factor for the near term. However another 'dollar positive' switch in sentiment can't be written off ahead of the all important Non-farm payrolls released on Friday. Local economic indicators today include Trade Balance figures and Retail sales which are expected to show growth of 0.4 per cent for the month of November. At the time of writing the Aussie is buying 91.95 US cents after hitting one month highs of 92.2 US cents overnight.