Markets Waver ahead of All-Important Non-Farm Payroll Print
AUD / USD
Expected Range: 0.7065 - 0.7330
The Australian dollar enjoyed mixed fortunes through trade on Thursday bouncing higher on the back of stronger than anticipated trade balance numbers before a softer than expected retail sales print prompted increased speculation the RBA would be forced to cut rates again in the not too distant future. The AUD touched intraday highs at 0.7269 before steadily edging downward and touching session lows at 0.7202. Having found support earlier in the week on stronger than anticipated first quarter growth the AUD struggled again on moves above 0.7250 as investors appear reluctant to extend any topside AUD runs. With looming speculation the Federal Reserve is nearing its second interest rate increase and continued expectations the RBA will be forced to cut its own benchmark cash rate again before years end to stimulate price growth the AUD remains under increasing downside pressure. Attentions today turn to an all-important U.S non-farm payroll print. A strong read could prompt a deeper AUD selloff and moves below 0.7150 while a soft read will all but cancel out a June policy adjustment and could lend some upside support to the Aussie dollar into the weekend.
NZD / USD
Expected Range: 0.6680 - 0.6880
The New Zealand dollar edged marginally lower through trade on Thursday struggling to gather any real upside momentum. Bouncing between session highs at 0.6833 and intraday lows at 0.6780 the trading pattern highlighted the lack of macroeconomic drivers and hesitancy to push support and resistance ahead of today’s all important U.S labour market report. A strong read could force the Kiwi to Fresh monthly lows and a deeper correction toward 0.6575.
GBP / AUD
Expected Range: 1.9850 - 2.0250
Having suffered a heavy sell off through trade on Wednesday the Great British Pound steadied maintaining a relatively tight range through trade on Thursday. A lack of headline macroeconomic data ensured the focus remained on political developments and Brexit bets. Investors appeared to settle and pare positions following early week polls that suggest proponents of leaving the EU were garnering increased support. While opinion polls suggest the race is still far from over there is currently a consensus within the market that the Brexit bid will fail. As with the Scottish Referendum those undecided voters tend to opt for stability when faced with a political and economic unknown adding support to those campaigning to remain within the European Union. Attentions today again turn to the unfolding Brexit story as Sterling continues to seesaw on shifting public sentiment.
USD, EUR, JPY
The U.S Dollar continued to relinquish recent hard fought gains when compared against the world’s haven currency the Japanese Yen. The Greenback fell to its lowest level in over two weeks through trade on Thursday, a precipitous fall having touched one month highs on Monday. Weaker than expected preliminary ADP non-farm payroll numbers dampened investor expectations the Fed would increase rates when it meets in a little under 2 weeks’ time forcing Fed Funds futures below 20%. The Dollar fell to 108.50 before finding support and edging marginally higher into the daily close. Risk aversion has increased through the week as investors appear uncertain when analysing the path of monetary policy adjustment through both the US and Japan. With both equities and oil suffering losses throughout trade on Thursday the Yen remained well bid across the board as an undertone of negative risk appetite kept haven currencies in vogue. The Greenback managed marginal gains against the Euro after a somewhat dovish press conference and economic assessment following its monthly monetary policy meeting. The ECB expectedly left rates unchanged and maintained its current stimulatory program, however ECB president Mario Draghi highlighted the struggles plaguing Europe only marginally upgrading its inflation and growth forecasts. Touching intraday lows at 1.1147 attentions now turn to an all–important U.S Labour market summary. Investors will be keenly attuned to the last piece of meaningful macroeconomic data ahead of the Fed’s June 14-15 meeting as a directional marker and point of reference in managing expectations surrounding the next rate hike.