5 Feb 2014
European open: Risk currencies perform overnight
FXStreet (London) - Overnight, the AUD rally on the shifted Reserve Bank of Australia stance ran out of steam. AUD/USD rallied strongly through yesterday’s session after the central bank dropped reference to concerns over AUD strength. The pair hit a peak of USD0.8938 before profit taking saw selling to USD0.8874. The pair has regained bullish momentum at USD0.8922.
The NZD rally was supported by strong unemployment numbers. Fourth quarter inflation dropped to 6.0 percent, with a 1.1 percent increase in jobs. The pair saw an unbroken rally from USD0.8056 to a peak of USD0.8255 with a return of some risk appetite. The continuing Kiwi labour market strength will give RBNZ governor Graeme Wheeler the space to rein in the economy with his intended rate hike in April.
In Europe this morning, services PMIs are expected to fall in line with expectations, continuing the story of some strengthening of overall Eurozone economic activity, but without any resulting pickup in employment numbers.
The key US event will be the ADP employment numbers ahead of Friday’s non-farm payroll print. Expectations are for a drop from 238k to 180k. However, given recent weaker US data, any downside risk to USD from weaker than expected jobs may be limited.
The NZD rally was supported by strong unemployment numbers. Fourth quarter inflation dropped to 6.0 percent, with a 1.1 percent increase in jobs. The pair saw an unbroken rally from USD0.8056 to a peak of USD0.8255 with a return of some risk appetite. The continuing Kiwi labour market strength will give RBNZ governor Graeme Wheeler the space to rein in the economy with his intended rate hike in April.
In Europe this morning, services PMIs are expected to fall in line with expectations, continuing the story of some strengthening of overall Eurozone economic activity, but without any resulting pickup in employment numbers.
The key US event will be the ADP employment numbers ahead of Friday’s non-farm payroll print. Expectations are for a drop from 238k to 180k. However, given recent weaker US data, any downside risk to USD from weaker than expected jobs may be limited.