Australian Dollar:

The Australian Dollar enters a new trading week having closed markedly lower on Friday after a dramatic selloff in the wake of a stronger than anticipated US Non-Farm Payroll (NFP) report. Having edged higher throughout the domestic session the Aussie plunged from intraday highs at 0.7838 to close the week buying just 0.7713 US cents. The reaction was immediate as the NFP print showed some 295,000 new jobs had been added to the labour pool throughout February while the unemployment rate fell to 6 and ½ year lows prompting investors and speculators to bring forward their expectations of when the Fed might adjust interest rates. With little on the economic docket today the Australian Dollar will likely remain subdued as markets respond to a Chinese Trade Balance report highlighting a fall in imports and overall weakness economic slowdown.          

We expect a range today of 0.7620 – 0.7850

 

New Zealand Dollar:

The NZD broke below 0.74 US cents Friday closing the week nearly two and a half cents lower. Having touched above 0.76 through trade on Thursday the Kiwi was driven lower on expectations the RBNZ will look to employ macro prudential tools to ease the burgeoning Auckland housing bubble while a strong US Non-Farm payroll report compounded matters. The stronger than anticipated NFP print prompted an immediate sell off in the NZD as the Greenback surged across the board. With little on the domestic docket today investors will be keenly awaiting Thursday’s Reserve Bank Rate statement and OCR announcement for further guidance.

We expect a range today of 0.7250 – 0.7450

 

Great British Pound:

The Great British Pound plummeted to 18 month lows as the gulf in monetary policy expectations widened on the back of a strong U.S. Non-Farm payroll report. Plunging from an intraday high of 1.5243 the Pound closed the week nearly 2 cents lower at 1.5038. The stronger than anticipated NFP print amplified expectations the Fed will adjust its benchmark interest rate at some point throughout the northern summer and highlighted the gap in policy between the consistently neutral Bank of England’s Monetary Policy Committee and the Fed’s Federal Open Market Committee. Attentions now turn to Manufacturing production Wednesday and BoE Governor Carney Thursday as the two domestic big ticket items steering direction.

We expect a range today of 1.9350 – 1.9650 

 

Majors:

The United States Dollar surged upward on Friday supported by a hardy Non-Farm Payroll report. The Dollar Index breached eleven and a half year highs as the labour department’s NFP report showed 295,000 jobs were added to the economy throughout February; a read well above markets and analyst’s expectations. The burgeoning labour market found further support in a falling unemployment rate which moved to six and a half year low at 5.5%. The strong print fuels speculation the Fed will ignore stagnant inflation and look to adjust interest rates at some point between June and September. It seems investors are already counting on a hawkish bias or a least a less dovish tone from the Fed when it meets next week.

The Euro slipped to 12 year lows falling below 1.09 for the first time since 2003, reaching intraday lows of 1.0828. The strong labour market account has served to highlight the disparities in economic fortunes between the world’s largest economy and the 19 nation shared unit. With Thursday’s ECB press conference and QE introduction fresh in investors’ minds the selloff was dramatic as the currency broke through key resistance levels at 1.0930 and continued lower. With parity again on the card attentions turn to Mario Draghi as the ECB president hits the wires on Wednesday while US Retail Sales will be the primary ticket item driving Greenback direction.

 

Data releases

AUD: ANZ Job Advertisements m/m 

NZD: Manufacturing Sales m/m

JPY: Current Account, Final GDP q/q, Bank Lending, Final GDP Price Index and Economy Watchers Sentiment

GBP: BRC Retail Sales Monitor

EUR: German Trade Balance, Sentix Investor Confidence, Eurogroup Meetings and German Buba Presidents Weidmann Speaks.

USD: Labour Market Conditions Index m/m