Australian Dollar:
The Australian Dollar relinquished gains earned following the RBA rate statement moving lower on softer than anticipated employment data. Unemployment rose in April from 6.1% to 6.2% while the employment change read fell. The downward adjustment in the number of people employed surprised traders and fuelled a brief AUD sell off ahead of support at 0.7940. Moving upward into the afternoon the Aussie touch intraday highs of 0.8005 before turning lower as stronger than expected US jobs data fuelled USD optimism and prompted calls for a stronger Non-Farm Payroll print this evening. Attentions now turn to the RBA’s quarterly monetary policy statement for a deeper outlook on Reserve Bank policy expectations with Chinese Trade Balance and US labour market numbers guiding offshore direction into the weekend.
We expect a range today of 0.7750 – 0.8100
New Zealand Dollar:
The New Zealand dollar moved lower through trade on Thursday breaking key resistance levels at 0.7450 on stronger U.S jobs data. The weekly U.S unemployment claims print showed numbers had fallen to near 15 year lows bolstering market confidence and expectations of a strong Non-Farm Payroll print this evening. The Kiwi has lost over 1.5 cents since through May thus far diving downward after the RBNZ adjusted its monetary policy stance eliminating the possibility of an upward rate adjustment. Attentions now turn offshore to a crucial U.S labour market report for direction into the weekend.
We expect a range today of 0.7320 – 0.7550
Great British Pound:
The Great British Pound offered little through trade on Thursday remaining range bound as Voters hit the polls. The Parliamentary election has been one the most tightly contested races for some time with neither party gaining a clear advantage throughout the lead up and the likelihood of a hung parliament seemed increasingly possible. Early exit polls suggest David Cameron’s Tories will earn 316 seats and in coalition with the Lib Dems regain the 326 seats needed to form a majority. Sterling bounced higher touching 1.5428 and we look to confirmation of the final vote later today.
We expect a range today of 1.9250 – 1.9680
Majors:
Upbeat employment data helped fuel a USD relief rally through Thursday as optimism returned ahead of today’s crucial Non-Farm Payroll print. Unemployment claims neared 15 year lows last week and offset yesterday’s dire ADP employment change report. Rallying across the board the USD found additional support in retreating German bund yields. Having moved to near 6 month highs German bunds relinquished gains into the end of trade helping US Treasury bonds maintain their yield advantage and bolstering the attractiveness of the world’s base currency. The 19 nation bloc unit moved lower breaking below 1.13 giving up 10 week highs as investors squared USD positions into today’s NFP report. With analysts anticipating an additional 224,000 jobs will have been created throughout April traders will be keenly focused on the final print. A disappointing read will likely fuel speculation the Fed will maintain its cautious outlook and push out the expectations of monetary policy normalisation. In contrast an upbeat narrative will enhance calls for a September rate adjustment and help fund a Greenback rally.
Data releases:
AUD: RBA Monetary Policy Statement
NZD: No Data
JPY: Monetary Policy Meeting Minutes
GBP: Parliamentary Election Result, Halifax HPI and Trade Balance
EUR: German Industrial Production m/m, German Trade Balance and Italian Industrial Production m/m
USD: Non-Farm Employment Change, Unemployment Rate, Average Hourly Earnings m/m and FOMC Member Dudley Speaks