Upbeat U.S wage data sends Aussie tumbling into the weekly close

AUD / USD

Expected Range: 0.6980 - 0.7130
The Australian dollar relinquished all of the week’s earlier gains through North American trade on Friday, plunging lower into the weekly close. Having maintained a tight trading range on and around approaches to 0.72 for much of the domestic session the Australian Dollar was heavily sold after US employment data showed average hourly earnings rose in combination with a drop in the overall unemployment rate. The uptick in wage growth helped bolster calls for consumer driven inflation and quashed suggestions the Fed would delay a secondary rate hike through 2016. The AUD plummeted through 0.7150 and 0.71 in the immediate aftermath touching session lows at 0.7051. With little headline data available to govern direction attentions turn to risk trends and commodity prices for bearing through Monday.

NZD / USD

Expected Range: 0.6580 - 0.6680

The New Zealand dollar plunged through North American trade on Friday relinquishing part of the week’s earlier gains on the back of upbeat US wage growth and a decline in the overall unemployment rate. The Kiwi gave up some 100 points moving into the weekly close after U.S average hourly earnings jumped 0.5% through January and 2.5% year on year. The upbeat wage assessment bolstered calls for a consumer/labour driven upturn in inflation and doused suggestions the Fed will need to waylay a secondary rate hike through 2016. Touching intraday and session lows at 0.6617 the Kiwi opens this morning marginally lower buying 0.6614 U.S cents. Attentions today turn to commodity prices and risk trends with little of note on the domestic or international economic docket to drive direction.

GBP / AUD

Expected Range: 2.0250 - 2.0550

The Great British Pound edged lower into the close on Friday having given up gains above 1.45 after stronger than expected U.S average hourly earnings bolstered calls for a Fed rate hike at some point through 2016. While Sterling found support after BoE Governor Mark Carney talked down the possibility of a reduction in interest rates mid-week the Pound remains vulnerable to diverging policy expectations. Key macroeconomic metrics suggest the U.K economic recovery is stalling and attentions turn to domestic Manufacturing Production and Fed Chair Janet Yellen as she testifies on the semi-annual Monetary Policy Report Thursday.

USD, EUR, JPY

Despite posting its biggest weekly decline since October 2011 the U.S dollar index rallied through trade on Friday following a stronger than expected increase in average hourly earnings. Wage data showed earnings jumped half a percent through January marking a 2.5% increase through 12 months and silencing calls the Fed will waylay a second rate adjustment into 2017. Having suffered a dramatic sell off mid-week on expectations the domestic economy is stagnating in the face of a global slow down and increased volatility the U.S dollar rallied across the board. Employment data was enough to drive the world’s base currency higher as wage growth sparked suggestions inflation would still move toward the Fed’s targeted benchmark. The Greenback rallied moving off 15 week lows against the Euro and 2 week lows against JPY as traders looked unwind the earlier shortening of USD positions. With little of note on the domestic docket through Monday direction will come from risk trends and commodity prices as oil again turns lower following concerns OPEC and Russia will not reach an agreement to curb production.