Stacks of euro, Swiss franc, and U.S. dollar banknotes are displayed in a bank in Bern, Switzerland in this file photo.
Australia: The Australian Dollar rose to its highest level since 6 February 6 before retracing some of these gains this morning. Figures released yesterday by the Australian Bureau of Statistics told the story that total employment grew by 71.5k in February which is the strongest jobs growth since July 2000.
Reserve Bank of Australia Assistant Governor Christopher Kent took some of the shine off the AUD's rally when he suggested the jobs figure may be a statistical aberration overnight, while talking up prospects for housing construction ahead.
Undoubtedly this was a solid jobs report but given other indicators of labour demand, including job vacancies, the rise may at least partly reflect sampling error as most still expect unemployment, steady at 5.4%, to rise ahead.
"The 'liquidity booster-shot ' that comes with a rate cut has helped our market jump up as much as 10.5% this year, and adds to the purses of consumers for discretionary purchases. It also means the Aussie dollar looks set to rise once more - AUD/USD jumped one per-cent overnight to $1.040, its highest level since February 6, after looking like it would finally head back to parity. The high dollar also impacts our market strength from the bottom up as most company bottom-lines denoted in US dollars are squeezed on repatriation," IG Markets strategist Evan Lucas said in an emailed statement.
Today, we expect a more subdued AUD market, after yesterday's excitement, with likely profit taking (it is Friday) but a bid tone remaining.
There was a surge in importer activity yesterday, especially buying of crosses such as Euro and GDP and follow up buying is likely today. Today in Asia, a clear slate means the market will likely consolidate recent moves
Majors The US Dollar was down against all G10 currencies overnight, with GBP the best performer, reversing recent weakness, gaining about 0.9% against the Greenback.
Speculation that Qatar is about to make large investments in UK infrastructure were a catalyst for the move in Sterling, plus some pre-positioning ahead of the UK Budget on 20 March.
Broadly better-than-expected US data turned out to be the catalyst for a modest unwind of long USD positions. A unique outcome in recent weeks, one possible interpretation is that stretched positioning means furthe gains in the USD will need to be driven by fundamental factors and not speculative flows.
Also benefiting from the move was the EUR which has been under pressure recently. Norway's Krone was an underperformer on news that the country's central bank may delay a possible monetary tightening.
15 MAR EU Feb Core CPI %yr
EU Q4 employment %qtr
US Feb Industrial production %mth
US Mar NY Fed factory survey
For latest pricing, ranges, visit www.bellpotter.com.au, www.igmarkets.com
To contact the editor, e-mail:
Most Popular Slideshows
- Australia Bids Adieu to Adam Spencer's Mornings on ABC's "702 Breakfast" Show [PHOTOS]
- Top 10 Hottest Celebrities with Shocking Weight Loss (And Find Out Their Secrets!) [PHOTOS]
- SEE PHOTOS! Eva Longoria Wears No Panties at Cannes 2013, Revealed in Embarrassing Wardrobe Malfunction [SLIDESHOW]
- Demi Lovato Snapped Getting Flirty with The X-Factor Boss, Simon Cowell? [PHOTOS]