Australian Dollar:
The Australian Dollar opens lower this morning having relinquished gains enjoyed in the aftermath of Fridays softer than expected U.S Non-Farm Payroll print. The Aussie dollar touched intraday highs of 0.7667 before the commodity driven currency was sold lower driving back below the 0.76 handle as markets square positions ahead of today’s crowded domestic docket. Retail sales and new job advertisements will precede the Central Banks policy statement with markets anticipating a downward rate adjustment. Should the RBA cut the benchmark cash rate for the second time in three months we could see a breakout of recent ranges and moves toward and through support at 0.7510/00
We expect a range today of 0.7420 – 0.7710
New Zealand Dollar:
The New Zealand dollar gave back gains earned Friday in the wake of the abysmal U.S employment report. Having marched upward touching intraday highs of 0.7622 the Kiwi fell back below the 0.7550 handle as the Greenback clawed back losses. Holiday trade meant liquidity was thin and the suggestion of an algorithmic trade triggering a larger than normal move seems to be the explanation at present for Monday’s sell off. Attentions turn now to the Australian Reserve Bank and its monthly rate statement with as the NZD moves closer to parity.
We expect a range today of 0.7510 – 0.7650
Great British Pound:
The Great British Pound moved lower into the close yesterday as thin liquidity amplified a USD rally seemingly triggered by a larger one off or algorithmic trade. Having edged above 1.4980 in the wake of Friday’s poor Non–Farm Payroll showing Sterling lost a full cent closing at 1.4883. With markets returning to full swing today we can expect a correction in positions as attentions turn to Services PMI for direction through the day ahead.
We expect a range today of 1.9410 – 1.9690 and 1.9535 – 1.9735
Majors:
The U.S dollar edged higher across the board Monday despite Friday’s poor Non-Farm payroll report continuing to weigh on the world’s base currency. Concerns the dismal job showing will waylay Fed plans to increase interest rates at some point in the 3rd quarter had prompted a Greenback sell off, a move amplified Friday and Monday in thin holiday trade. The Euro tested 1.1040/50 however failed to break through the key resistance mark and was sold off to touch session lows of 1.0910. The move was somewhat unusual and not one triggered by macroeconomic fundamentals or other news suggesting in a market where liquidity is low an algorithmic trade may have exacerbated the downward drive. With markets returning to full capacity today we expect a squaring of positions and full reaction to Friday’s jobs data. Attentions turn to Eurozone services data and US employment reports for direction through Tuesday and into the week ahead.
Data releases
AUD: AIG Services Index, Retail Sales m/m, ANZ Job Advertisements m/m RBA Cash Rate Announcement and RBA Rate Statement.
NZD: No Data
JPY: No Data
GBP: Services PMI and FPC (Financial Policy Committee) Meeting Minutes
EUR: Spanish, Italian and Eurozone Services PMI, Sentix Investor Confidence and PPI m/m
USD: JOLTS Job Openings, IBD/TIPP Economic Optimism and Consumer Credit m/m.