Australian FOREX Daily Outlook 08/10/2007

Positive Jobs data out of the US fails to provide any dollar confidence.

CURRENCY TRADING SUMMARY –08 OCTOBER 2007 (00:30GMT)

·U.S. Dollar Trading (USD) was volatile throughout the New York session as Non Farm Payrolls data surprised on the upside, coming in better than forecasted at 110K (Forecast: 90k) jobs for the month of September, the highest level since May. Initially the USD was able to gain against a basket of majors on boisterous data, further supported by an upward revision from the previous month which showed a decline of -4k to 89K. However, the dollar paired its gains as buoyant data did little to quell market expectations of future rate cuts in slowing economy. In other news, Unemployment rate was released on expectations moving to 4.7% from the previous 4.6%. In U.S. share markets the NASDAQ was up 46.75 points (1.71%) whilst the Dow Jones was also up by 91.70 points (0.66%). Crude oils eased on Friday by US$0.48 a barrel to US$80.96. Markets will be closed on Monday.

·The Euro (EUR) moved on the back of jobs data out of the US, easing form key levels, before rebounding on speculation of ongoing monetary loosening from the Federal Reserve, to end the day up by 0.1%. Growing complaints by European Politicians about the Euro’s strength have added to the risk in the market that the dollar could find firm footing in the run-up to the G7 meeting. Overall the EURUSD traded with a low of 1.4035 and a high of 1.4158 before closing the day at 1.4149 in the New York session.

·The Japanese Yen (JPY) eased more than 0.1% following solid jobs data out of the U.S. Overall the USDJPY traded with a low of 116.36 and a high of 117.29 before closing the day at 116.85 in the New York session. Japanese markets will be closed on Monday due to holidays.

·The Sterling (GBP) spiraled following a positive payrolls data out of the U.S., before rebounding in the later par of the session. Overall the GBPUSD traded with a range of a low 2.0303 and a high of 2.0440 before closing the day at 0.0428 in the New York session. Looking ahead a heavy data day is scheduled to begin the week, with Industrial Production and PPI to name a few.

·The Australian Dollar (AUD) extended its gains above 23 year highs breaking key psychological levels of 0.9000. Much of the moves were attributed to a demand in commodities, in a volatile market. Overall the AUDUSD traded with a range of a low 0.8872 and a high of 0.9006 before closing the day at 0.8987 in the New York session.

·The South African Rand (ZAR) strengthened over 1.1% against the dollar on Friday as the greenback lost steam after an initial rally brought on by favorable US payrolls data. Overall the USDZAR traded with a low of 6.8065 and a high of 6.9135.

·Gold (XAU) bounced on Friday in choppy activity, moving lock-step with the dollar, as investors brushed aside robust US employment data and bet the world’s biggest economy was still on a slowing path. XAU traded with a low of 721.25 and a high of 738.35.