Australian Dollar:
The Australian dollar was driven downward on Friday as investors jumped on the world’s base currency following a stronger than anticipated Non-Farm payroll print. Employment data showed an additional 280,000 jobs were added to the economy throughout May comfortably surpassing expectations and bolstering hopes the Fed will raise rates for the first time in a decade before the year is out. The Aussie lost 100 points in the immediate aftermath plunging from 0.7720 to 0.7613 before finding support on approaches to 0.76. With most Australians enjoying the June long weekend domestic trade will likely remain flat forcing attentions offshore where Chinese Trade balance numbers could prompt volatility in a market lacking liquidity.
We expect a range today of 0.7530 – 0.7730
New Zealand Dollar:
The New Zealand dollar moved perilously close to the psychological 0.70 mark Friday as traders and investors increased USD long positions following a stronger than anticipated Non-Farm payroll read. Some 280,000 new jobs were added to the economy throughout May while the overall labour force jumped 0.1% increasing expectations the Federal Reserve will raise rates as early as September. With little domestic data on hand Monday attentions will turn offshore with Chinese Trade Balance numbers governing direction.
We expect a range today of 0.6980 – 0.7120
Great British Pound:
The Great British Pound was forced lower Friday as investors backed bets the US Federal Reserve will raise the bench market cash rate as early as September following a stronger than anticipated Non-Farm payroll report. Touching intraday lows of 1.5215 in the immediate aftermath Sterling fail to recover the 100 point selloff and we open this morning buying 1.5254. Attentions now turn to Wednesday’s manufacturing production report for direction throughout the week ahead.
We expect a range today of 1.9875 – 2.0125
Majors:
The U.S Dollar bounced higher Friday as Non-farm payroll numbers comfortably surpassed investor expectations. The Greenback rallied to touch 13 year highs against the Japanese Yen and rocketed upward against the Euro sending the 19 nation combined unit to intraday lows of 1.1083. Employment data released by the Bureau of Labor Statistics showed 280,000 new jobs were added to the economy throughout May while a rise in the unemployment rate was overshadowed by an equal advance in the number of labour force participants. The stronger than anticipated print bolstered expectations and improved the odds of a September rate hike with an expectation the Central Bank will move to increase the bench mark cash rate twice before years end. With confidence in US economic recovery returning attentions this week turn to Retail Sales and Consumer Sentiment for further signs the revival is spreading to the individual and real economy.
Data releases:
AUD: No Data – Public Holiday
NZD: No Data
JPY: Current Account, Bank Lending, Economy Watchers Sentiment and Final GDP
GBP: BRC Retail Sales Monitor
EUR: German Industrial Production m/m, German Trade Balance and Sentix Investor Confidence
USD: Labour Market Conditions Index.