Moderate greenback strength governed currency market activity overnight ahead of tonight's Non-farm payroll data. Economic feedback from the states overnight saw US Initial Jobless claims fall to 469,000 for the week ending Feb. 27, against a previous 498,000 providing a positive signal ahead of tomorrow's Non-farm payrolls which is expected to show 65,000 job cuts in Feb. US pending home sales slid in the month of January, recording a 7.6 percent contraction against the previous month's growth of 1 percent. Economists had expected growth of 1.6 percent. Factory orders exceeded expectations in January recording a 1.7 percent rise against a previous upwardly revised 1.5 percent - the expectation was for a rise of 1.6 percent. Non-farm productivity surpassed estimates to record 6.9 percent growth in January from a previous rise of 8.1 percent. Analysts had estimated more moderate growth of 6.2 percent.
Across the Atlantic, as anticipated the Bank of England kept its benchmark interest rate at a record low of 0.5 percent overnight for the thirteenth consecutive month. The Central bank also confirmed no extension to the 200 billion pound quantitative easing program. Despite data suggesting the economy is in recovery mode, recent times has seen the bank warn of a slow and protracted recovery with economist's now predicating interest rates to remain at current levels until 2011.
The European Central Bank also left the benchmark interest rate unchanged at 1 per cent. In a speech the ECB Governor Jean Claude Trichet maintained an optimistic view of economic conditions however, once against indicated an uneven recovery may be on the cards for the European economy. Euro-Zone GDP rose 0.1 percent in the fourth quarter representing an annual contraction of 2.1 percent.
Locally, in the absence of major economic news we expect a reasonably subdued day for the local unit. At the time of writing the Aussie dollar is buying just shy of 90 US cents - with equity markets tipped to see some moderate strength which could act as a supporting factor for the Aussie. However we also have to be mindful of some pre nonfarm trading, where traders may seek to square up or take a view before the figures later tonight.