The US Labour Market remains key

Australian Dollar:

The Australian dollar reached its lowest level in more than a week yesterday after retail sales grew by a disappointing 0.2 percent during the month of February. Whilst Australia’s underlying trade balance did manage to crack the $1 billion mark for the second consecutive month, making a positive contribution to the broader growth story, investors appeared reluctant to take the Australian dollar higher choosing instead to sit on the sidelines during the lead up to this evening’s non-farm payroll report from the United States. Trading to an overnight low of 0.9204 when valued against its US Counterpart, ranges are expected to remain tight for much of today’s local session as the Aussie opens weaker this morning at a rate of 0.9228.

• We expect a range today of 0.9190 – 0.9260

New Zealand Dollar:

Consolidating its losses off the back of Wednesdays Global Dairy Trade Auction in which diary prices slumped, the New Zealand dollar has been far from inspiring over the past 24 hours having traded in narrow band when valued against its US Counterpart. Drifting between a low of 0.8513 and a high of 0.8579 it appears investors have already removed substantial liquidity from circulation ahead of this evenings all important labour market report from the United States where its expected US employers added around 200 000 new jobs in February. With Greenback direction set to be the Kiwi’s greatest influence tonight the New Zealand dollar opens 0.3 percent lower as it currently buys 85.40 US Cents.

• We expect a range today of 0.8510 – 0.8580

Great British Pound:

The Great British Pound has fallen for a third consecutive day overnight after a report showed services growth unexpectedly slowed in March. Compounding the Sterling’s woes Bank of England Governor Mark Carney re-iterated his previous stance that there remains substantial slack in the labour market, slack which needs to be used before interest rates can rise. Dropping from an earlier high of 1.6659 the Great British Pound is lower this morning at rate of 1.6595. In other moves the Sterling opens weaker also against the Aussie 1.7978 and the Kiwi 1.9423.

• We expect a range today of 1.7950 – 1.8020

Majors:

Whilst interest rates were left on hold overnight European Central Bank President Mario Draghi did state that policy makers have been discussing the possibility of rolling out their own form of quantitative easing, a measure which involves the central bank buying substantial amounts of assets in an attempt to raise prices and stimulate growth. In reaction to inflation which remains substantially below its target, no doubt the development of policy suitable for 18 individual nations means the ECB may face challenges far greater than those experienced by the BOE and US Fed. Given the threat of exceptionally loose monetary policy investors took the opportunity to sell the Euro overnight taking it to a low of 1.3697 when valued against its US Counterpart. Lower this morning at a rate of 1.3717 tonight’s focus will be all about the US employment number where its expected the official unemployment rate will drop from 6.7 percent to 6.6 percent.

Data releases

• AUD: No data today
• NZD: No data today
• JPY: No data today 
• GBP: Halifax HPI m/m
• EUR: No data today