ClearFX Daily Commentary - 08/07/2011

Australian Dollar: The Aussie shot back over US107 cents yesterday after stronger-than-expected jobs data. The Australian Bureau of Statistics data showed a rise in full time positions of 59,000 which was partly offset by a fall in part-time positions leaving the unemployment rate steady at 4.9 per cent for a second consecutive month. The currency “gapped” from 1.0680 to 1.0721 immediately after the news and rallied all the way to an intraday high of 1.0753. During the offshore session, the Aussie moved to a high of 1.0775 on the back of improved risk sentiment as weekly jobless claims in the United States fell by 14,000. The unit opens well supported on Friday at 1.0760

We expect a range today of 1.0720 – 1.0800

New Zealand Dollar: The New Zealand Dollar remains strong against its greenback counterpart and opens on Friday at 0.8320 after breaking through resistance at US83 cents late in offshore trade. In the absence of any local economic data yesterday, the kiwi briefly hit an intraday high of 0.8290 after following the Australian Dollar higher after better-than-expected jobs data across the Tasman. The currency hit an overnight and post-float high of 0.8343 boosted by positive risk sentiment in the lead-up to US jobs data tonight. On the cross rates, the kiwi is trading at 0.5780 against the Euro and 0.5200 against the British Pound.

We expect a range today of 0.8280 – 0.8345

Great British Pound: As expected the Bank of England kept its benchmark interest rate on hold yesterday at a record low of 0.50 per cent. Whilst policy makers continue to focus on stimulating growth, recent economic data suggests the British economy remains very much in stagnant waters. Following the rate announcement, the pound was sold across the board hitting a low of 1.5940 against its Greenback counterpart ahead of today’s opening level of 1.5958. Meanwhile, the pound opens sharply lower against both the Australian Dollar (1.4800) and the New Zealand Dollar (1.9170).

We expect a range today of 1.4750 – 1.4835

Majors: For the second time in 3 months, the European Central Bank (ECB) has raised interest rates by 25 basis points. The benchmark rate now stands at 1.5 per cent and the move last night is seen in some sections as controversial given the parlous economic states currently prevailing in Greece and Portugal. The 17-nation euro zone currency opens higher today at 1.4357 and has rallied from an overnight low of 1.4220 after ECB President Jean-Claude Trichet signalled that rates may be raised again. Meanwhile, the big dollar received a boost after US weekly jobless claims fell by 14,000 in the week ending July 2. The greenback opens at a 4-week high against the Yen at 81.20.

Data releases

AUD: No data today

NZD: No data today

JPY: Eco watchers survey, June

GBP: Producer Price Index, June

EUR: No data today

USD: Non farm payrolls, June