Non-Farm Payrolls Pushes Dollar Down, Increasing Likelihood of Rate Cut
CURRENCY TRADING SUMMARY – 07 APRIL 2008 (00:30GMT)
·U.S. Dollar Trading (USD) was weaker on Friday as a result of a worse than expected Non-Farm Payrolls data release indicating employment fell by 80,000 in March, some 30,000 less than what was forecast. February’s figures were also revised to show a loss of 76,000 jobs rather than the 63,000 it originally reported, further indicating the world’s largest economy may be slipping into recession. Further to this news, the unemployment rate rose 0.3% to 5.1% its highest level in almost 3 years fuelling thoughts the Fed may cut rates yet again as early as the end of this month. The US share market had a mixed reaction to the weak economic data with the NASDAQ rising 7.68 points (0.3%) and the Dow Jones falling -16.61 points (-0.1%). Oil prices gained US$2.40 a barrel to US$106.23. Looking ahead, consumer credit data is to be released with forecasts expected to be 5.5, a drop from February’s figure of 6.9.
·The Euro (EURO) remained strong against the major currencies in the wake of weak economic data being released out of the U.S on Friday. The EURUSD traded at a high of 1.5775 and a low of 1.5639, before closing at 1.5718 in the
·The Japanese Yen (JPY) strengthened on the back speculation of a slowdown in the global economy, the USDJPY had a high of 102.69 and a low of 101.47, before closing at 101.76 in the
·The Sterling (GBP) closely tracked the U.S and showed a decline against the Euro. The weak U.S is expected to hurt U.K growth which is prompting traders to add to bets that the BoE may cut rates as early as next week to help sure up the economy. The GBPUSD traded at a high of 2.0049 and a low of 1.9912, before closing out at 1.9912 in the
·The Australian Dollar (AUD) remained strong in the face of weak Retail Sales figures being released on Friday in the Asian session, before rallying in the U.S session after the release of Non-Farm Payroll figures. Sales figures contraction of -0.1% is indicative of RBA Governor Stevens’ thoughts that there is a change in demand amongst consumers. The AUDUSD traded at a high 0.9228 and a low of .9101 before closing at .9217 in the
·Gold (XAU) rose on Friday following a weaker U.S economic outlook and solid oil prices. Prices rose US$8.10 an ounce (0.9%) to US$917.70.
TECHNICAL COMMENTARY
| Currency | Sup 2 | Sup 1 | Spot | Res 1 | Res 2 |
| EUR/USD | 1.5510 | 1.5639 | 1.5731 | 1.5774 | 1.5787 |
| USD/JPY | 100.24 | 101.27 | 101.56 | 102.95 | 103.59 |
| GBP/USD | 1.9760 | 1.9911 | 1.9930 | 2.0048 | 2.0090 |
| AUD/USD | 0.9024 | 0.9100 | 0.9221 | 0.9254 | 0.9290 |
| XAU/USD | 873.00 | 888.20 | 915.70 | 914.57 | 921.00 |
·Euro – 1.5731
Initial support at 1.5639 (Apr 4 low) followed by 1.5510 (Apr 3 Low). Initial resistance is now located at 1.5774 (Apr 4 high) followed by 1.5787 (Apr 1 high).
·Yen – 101.56
Initial support is located at 1021.27 (38.2% retracement of the 98.56 to 102.95 advance) followed by 100.24 (61.8% retracement of the 98.56 to 102.95 advance). Initial resistance is now at 102.95 (Apr 3 high) followed by 103.59 (Mar 11 high).
·Pound – 1.9930
Initial support at 1.9911 (Apr 4 low) followed by 1.9760 (Apr 3 low). Initial resistance is now at 2.0048 (Apr 4 high) followed by 2.0090 (Mar 28 high).
·Australian Dollar – 0.9221
Initial support a 0.9100 (Apr 4 low) followed by 0.9024 (76.4% retracement of the 0.8953 to 0.9254 advance). Initial resistance is now at 0.9254 (Mar 27 high) followed by 0.9290 (61.8% retracement of the 0.9499 to 0.8953 decline).
·Gold – 915.70
Initial support at 888.20 (Apr 3 low) followed by 873.00 (Apr 1 low). Initial resistance is now at 914.57 (Apr 4 high) followed by 921.00 (Apr 1 high).
