Greenback stronger on impressive unemployment claims

Australian Dollar:

The Australian dollar continued to outperform the other major currencies on Thursday however this time was bolstered by strong Chinese numbers released just before midday. Chinese flash manufacturing data helped the Aussie dollar jump another half a cent to highs of 0.9469 after reaching a juncture not seen in a year and a half with a figure of 52. This beat out forecast of 51 where any number above 50 shows expansion. The strong Chinese print is a welcome sign where there have been concerns as of late in regards to the China growth story, Australia’s biggest trading partner. Overnight the Greenback rallied underpinned by strong jobless claim figures as the AUD opens marginally weaker against the US this morning at 0.9415. Heading into the weekend there is no local data being released as investors will turn offshore for direction. 

• We expect a range today of 0.9375 – 0.9455

New Zealand Dollar:

The New Zealand dollar has spent the majority of the week waiting on Thursday’s RBNZ rates decision to bring volatility back into the higher yielding currency and the economic release did not disappoint. The Reserve Bank of New Zealand lifted their cash rate to 3.5 per cent early on Thursday and the market watched as the Kiwi currency dropped heavily on the back of an aggressive accompanying statement talking the NZD lower. Governor Wheeler stated that the high levels of the New Zealand dollar are “unjustified and unsustainable and there is potential for a significant fall”, additionally he mentioned that the currency is still yet to adjust to falling commodity prices. Wheeler went on to comment that the stance of the RBNZ will move to a more neutral tone as they are happy with the current interest rate levels. Overnight the Kiwi continued to slide after strong US numbers were announced touching lows of 0.8565 and opens this morning over a cent weaker at 0.8571 against the US dollar. Investors will watch today as business confidence will today wrap up an interesting end to the week.

• We expect a range today of 0.8530 – 0.8610

Great British Pound:

The British Pound struggled last night in the markets as the Sterling was hit twice, by weak local data in retail sales and strong US unemployment numbers. To start off UK trade retail sales numbers were shown to rise 0.1 per cent. This missed the mark of an estimated 0.2 per cent uptake and the GBP stumbled against the Greenback. As US trade opened the Dollar rallied hard across the board and the markets watched the Cable fall further. This morning the GBP opens slightly higher than the daily lows of 1.6964 at 1.6982 over half a cent down from Thursday. The movements against the AUD were similar losing marginal ground to open today at 1.8030 however against the Kiwi which underperformed heavily across the board opens this morning at 1.9796. Friday will make an interesting end to the week as preliminary GDP figures are to be released in UK.

• We expect a range today of 1.7985 – 1.8085

Majors:

The Greenback was the strongest performer overnight underpinned by an impressive fall in unemployment claims. The numbers were at 8 year lows after the US labour department printed the amount of citizens claiming jobless benefits dropped by 19,000 where an increase in claims was expected.  These figures are important indicators as the US Federal Reserve is currently in the process of reducing its stimulus program based on the US economies health so there is a clear path for an interest rate increase sometime in 2015. The US gains were softened however only slightly by a fall in new home sales as the market seemed to shrug off this negative economic data. Out of Europe impressive services and manufacturing data were shown, the main highlight out of Germany which showed strong numbers across the board. This morning the Euro opens slightly lower against the US dollar and investors will watch US and Euro markets tonight for guidance heading into the weekend.

Data releases:

• AUD: No Data
• NZD: ANZ Business Confidence
• JPY: Tokyo Core CPI y/y, National Core CPI y/y, SPPI y/y
• GBP: Prelim GDP q/q, Index of Services 3m/3m
• EUR: GfK German Consumer Climate, German Ifo Business Climate, M3 Money Supply y/y, Private Loans y/y, Beldian NBB Business Climate
• USD: Core Durable Goods Orders m/m, Durable Goods Orders m/m