Currency Updates:
AUD/USD The pair was hit hard in Europe’s morning as the USD saw a broad based spike higher. AUD/USD dived from the 0.7635 area to a low of 0.7583 before bouncing a bit into NY’s open. The pair sat near 0.7605 as NY got going and bull pressure was applied early. The miss to March ADP jobs figures sent the USD spiraling lower. AUD/USD rallied near 0.7630 and eventually touched 0.7640. The gains eroded though even as the USD remained heavy. NZD was firm throughout NY’s session and this saw AUD/NZD briefly dip below 1.0190. AUD/USD was unable to benefit from broad USD weakness and sat near 0.7605 late in the day. OZ Feb trade balance is the main risk for AUD traders in Asia. The balance is f/c to deteriorate to AUD-1.3b from the prior AUD-980mm. A worse than f/c result should weigh on AUD/USD and the pair might test key support in the 0.7550/60 zone. A break of that support is unlikely though as the US jobs report looms and the market might not want to get overly short in case the US jobs are weak.
EUR/USD The pair sat near 1.0760 into NY’s open after rebounding off 1.0715/20 support in Europe’s morning. The big miss on ADP (lowest reading since Jan 2014) sent US yields and the USD tumbling. EUR/USD spiked higher and began clearing spec offers in the 1.0790/20 zone. NY could only manage to reach 1.0800 though and the pair slid even as the USD continued to slide elsewhere. Another spike towards 1.0800 ensued after ISM missed but macro sellers prevented the pair from breaking above 1.0800. The pair then lingered in the 1.0760/80 zone for the remainder of NY. EUR/USD sat nearer the low end of the range late in the day as sour risk sentiment had EUR/JPY trading heavy. This kept EUR/USD weighed down and it sat just above 1.0760 late in the day. The Asian and European session may see limited action as there are no major data releases to cue off. Things might heat up in NY as weekly jobless claims and February factory orders are released. Any reaction to that data will be short lived though as the market awaits the US jobs data. Until then the broad 1.06-1.10 range remains intact.
USD/JPY Despite a poor Tankan and Abe advisor Yamamoto calling for the BOJ to ease again at this month’s meeting, the yen was one of the better performing ccys today. Weak Mar ADP and ISM reports sent the USD broadly lower & drove USD/JPY back down to within 2 pips of its 119.42 Asia nadir. That was after early London bids got it to 120.33 v Tues’s 120.37 high at the 21-DMA. Also dissuading bidders by the high was the dn TL off the Mar highs at 120.41. Prices remain heavy heading toward the close and are below the daily Tenkan at 119.77. And though the Kijun at 120.19 has been pierced intraday each day this week, it has not been closed above. Japanese equity weakness took the TOPIX to its lowest since Mar 11 and closer to the prospective 38.2% Fibo of the Jan-Mar rise at 1,498.67. The N225’s 38.2% is 18,561. Unless there is a major risk washout or so much weakening of US data to seriously doubt the Fed can raise rates this year, Japanese outbound investment demand should keep USD/JPY above its daily Cloud base, which on Thur rises to last week’s 118.33 pullback low. 2.8b of 120.00s expires Thurs should also attract. US Trade data Thur.
Looking Ahead – Economic Data (GMT)
• 23:30 AU TD-MI Inflation Gauge Mar 0%-prev
• 00:30 AU Trade Balance G&S (A$)* Feb f/c -1300m, -980m-prev
• 00:30 AU Goods/Services Imports* Feb 3%-prev
• 00:30 AU Goods/Services Exports* Feb 1%-prev
• 23:50 JP Foreign Bond Investment w/e 765.5b-prev
• 23:50 JP Foreign Invest JP Stock w/e -352.8b-prev
Looking Ahead – Events, Other Releases (GMT)
• No Significant Events
