Daily Forex Commentary

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Monday, 06 February 2012 - Market Commentary

By Carly Pickering

Australian Dollar

The Australian Dollar traded in cautious ranges throughout its onshore session on Friday, as markets remained on tenterhooks ahead of key unemployment data from the world's largest economy. With Asian equity markets marginally down the Australian Dollar drifted lower from opening levels around 1.0710 to 1.0680 by the switch to offshore hours. However, with sentiment improving into Europe the Aussie picked up from intra-day lows and eventually shot back through 1.0700 to above 1.0780 after the much anticipated US non-farm payrolls was released. An additional 243,000 jobs added during the month of January boosted economic outlook for the United States and in turn demand for the higher-yielding Australian Dollar. Holding on to most of these gains into close of markets, the Aussie opens this week lower at 1.0725 with today’s retail sales figures for the month of December the first scheduled risk event for the week.

We expect a range today of 1.0680 – 1.0780

 

New Zealand Dollar

The New Zealand Dollar rallied on Friday after a report out of the US showed employers in the worlds biggest economy added more jobs than forecast in January, spurring demand for riskier assets. After earlier opening the day at a rate 0.8330 against its US Counterpart, the kiwi was well purchased up above 83 US cents, reaching an eventual high of 0.8378 in early morning trade. Nearing the highest levels seen since September last year the New Zealand Dollar opens this morning stronger against the Greenback, currently swapping hands a rate of 0.8335. Looking ahead today ranges over the coming 24 hours a most likely to be dictated by offshore happenings given the public holiday taking place domestically.

We expect a range today of 0.8260 – 0.8370

 

Great British Pound

Following a relatively subdued start to the day the Great British Pound found around half a cent on the upside heading into European trade with investors driving the Sterling to an 24 hour high of 1.5859 against its US counterpart. Despite Services PMI coming in well above expectation with a positive reading of 56.0, the Sterling ran out of steam late in the session dropping to reach an eventual low of 1.5749. Opening this morning at 1.5765, a level slightly lower to where we left it on Friday, speculation continues to mount that the Bank of England will raise its target for asset purchases when the central bank meet this coming Thursday. Meanwhile this morning Sterling opens weaker against both the Australian and New Zealand Dollar currently trading at a rate of 1.4685 and 1.8875 respectively.

We expect a range today of 1.4640 – 1.4780

 

Majors

The Greenback has strengthened from levels close to post-war lows against the Japanese Yen after this Januarys Non-Farm Payroll report surprised markets with a figure well above expectations. Showing employers to have added an impressive 243,000 jobs last month, a figure larger than both last months figure of 203,000 and this months expectation of 150,000, the Greenback rallied from 76.20 to 76.60 Yen. With US non-manufacturing PMI also surprising to the upside this combination of events placated market speculation of additional economic stimulus by the Federal Reserve; speculation which has weighed on the value of the US Dollar of late. Also rallying against the Euro throughout Fridays offshore session the pair moved lower to 1.3080 after Greenback strength was magnified following a still absent agreement between Greece and its private creditors, as well as a a 0.4% drop in Euro zone retail sales. The US Dollar did pare some of its gains into the close of markets and this morning opens slightly higher against both the Euro, which hovers just above the 1.3100 handle, and the Yen just above 76.50.

 

Data releases:

AUD: Retail Sales m/m; ANZ Job Advertisements m/m

NZD: Bank Holiday

JPY: No data due for release

GBP: Halifax HPI m/m

EUR: Sentix Investor Confidence; German Factory Orders m/m

USD: No data due for release

 

 

 

 

 

 

 

 

 

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