Daily Forex Commentary

09 January 2017 - USD rebounds on stable labour market data

By Matt Richardson

New Zealand Dollar: 

The New Zealand dollar relinquished hard fought gains enjoyed through trade on Wednesday and Thursday moving lower into the weekly close and slipping back below 0.70 U.S cents. Greenback selling pressure eased through trade on Friday as non-farm payroll numbers and improved wage growth showed the U.S labour market remains steady prompting calls for consumer driven inflation and additional rate hikes through 2017. The USD advanced against a series of major currency counterparts and the Kiwi suffered. With relatively strong resistance in place, moves beyond 0.7030 will likely be defended and meet selling pressures in the near term. With no macroeconomic data at hand today direction will likely stem again from U.S data sets and wider market sentiment.

We expect a range today of 0.6900 – 0.7000

 

 

Australian Dollar:

The Australian Dollar closed the week lower when valued against its US counterpart on the back of Friday’s robust US jobs report. US non-farm payrolls increased by 156,000 in December, slightly down on the 175,000 forecast, however there was a 26,000 upward revision to the previous months’ job gains. The Aussie pulled back from a weekly high of 0.7356 falling to a low of 0.7285 during Friday evening trade. The pair is currently trading at 0.7294. We now expect support to hold on moves approaching 0.7270 while any upward push will likely meet resistance around 0.7315. Attentions now turn to today’s Building Approvals and ANZ Job Advertisements.

We expect a range today of 0.7250 – 0.7350

 

Great British Pound:

The Great British pound relinquished much of the gains enjoyed through Trade on Wednesday and Thursday suffering heavy selling pressure Friday. The USD dollar rallied across the board through trade on Friday bolstered by a stronger than anticipated job’s report. Despite a decline in the number of Jobs added to the economy average hourly earnings increased, putting pressure on wage growth and opening the door for a possible uptick in consumer driven inflation. The GBP fell through 1.23 and 1.2250 to touch intraday lows at 1.2240 as wary investors look to a Supreme Court decision on parliaments roll in Brexit negotiations for wider Pound direction in the coming fortnight. Attentions today turn to a relatively light macroeconomic calendar for direction as political uncertainties drive direction.

We expect a range today of 1.7500 – 1.7700

 

Majors:

The US Dollar reversed its short term sell off despite non-farm payrolls missing expectations by 20,000 jobs .The release showed an increase of 156,000 jobs in the last month of 2016. Unemployment figures remained steady (4.7%) with rising wage pressures heading into the New Year. JPY was hit hardest on Friday evening trading losing 1.2% against the US Dollar and closing on the 117.00 mark. The EUR/USD uptrend paused as it pulled off resistance levels at 1.06 and will test the 1.5115 handle. Close analysis of the Trump administration takes shape this week as nominees are expected to be cleared in a Republican controlled senate. USD long trades continue to weaken as the speed of policy implementation continues to be unknown as the first policy statements draw closer. Flows will be light on Monday as Japan observes a bank holiday with close eyes on the world’s second largest economy on Tuesday as China releases its inflation figures.

 

Data releases:

AUD:

AIG Construction Index, Building Approvals and ANZ Job Advertisements.

NZDNo Data

JPY:

Bank Holiday

GBPHalifax HPI

EUR:

Italian Monthly Unemployment Rate, Sentix Investor Confidence and Eurozone Unemployment Rate

USD:

Labour Market Conditions Index and Consumer Credit

 

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