US labour market report, key driver

AUD / USD

Expected Range: 0.7420 - 0.7500

The Australian dollar worked hard in an effort to re-capture lost ground when valued against its US Counterpart yesterday, butting its head up against the 75 US Cents mark on multiple occasions. Having initially gained around 0.6 percent during the domestic session, a smaller than expected trade deficit as well as a positive retail sales print for the month of April both assisted the Aussie in its upward push. Despite the early buy signs, the gains however have proved to be short-lived over the past 24 hours, with resistance close to 0.7500 proving well entrenched. In a morning that’s likely to be dictated by minutes from the Reserve Banks meeting on Tuesday which saw policy makers cut interest rates to a record low of 1.75 percent, investors will be looking specifically towards any inflation references given last week’s sharp CPI decline was the main catalyst behind the policy adjustment. Opening flat this morning the Australian dollar currently buys 74.63 US Cents.

NZD / USD

Expected Range: 0.6840 - 0.6920

In what has been a generally uninspiring session for the New Zealand dollar the Kiwi has drifted between a low of 0.6871 and a high of 0.6917 when valued against its US Counterpart. Offering a sense that investors are already sitting tight ahead of this evening’s non-farm payroll report from the United States, the US dollar has managed to advance to a one-week high overnight following supportive comments from two US Federal Reserve officials. Opening marginally higher at a rate 0.6881, markets are expected to act in a similar way today in anticipation of greater levels of liquidity tonight.

GBP / AUD

Expected Range: 1.9330 - 1.9450

Service Sector growth weakened during the month of April a report overnight showed with Services PMI slumping to its lowest point since February 2013. Having only a muted impact on the Great British Pounds value the Sterling has traded between a low of 1.4443 and a high of 1.4529 when valued against its US Counterpart over the past 24 hours. Whilst tonight’s flows are likely to be dictated by US macro announcements next week is also shaping up as a big one given the Bank of England meet on Thursday. Opening weaker versus the Greenback at a rate of 1.4481 the Sterling is lower versus both the Australian dollar (1.9400) and the New Zealand dollar (2.1037).

USD, EUR, JPY

Wall Street gave up early gains finishing yesterday’s session broadly flat, still 0.7 percent down for the week. Whilst the US dollar Index a measure of the Greenback against a basket of currencies advanced to a one week high there has been some early signs of anxiety overnight as investors remain keen to see how tonight’s labour market report, will influence the pace of rate hikes by the US Federal Reserve. Expecting to see job gains totalling 203 000 for April, in comments which were supportive of existing monetary policy settings, Fed Member James Bullard said overnight that 2-3 interest rate hikes this year remains a reasonable expectation. In notable currency moves yesterday the Japanese Yen continued to trade lower with the USD/JPY stronger at 107.259 this morning, meanwhile the Euro is also lower having lost 0.6 percent versus its US Counterpart.