Aussie higher on weak US unemployment claims

Australian Dollar:

The Australian dollar dipped during Thursday’s Asian trade amidst expectations inflation will rise less than formerly forecast during the next 12 months. The previous data released from the Melbourne Institute showed a projection for a 3.8 per cent rise however the numbers showed 3.1 per cent when announced before midday. The Australian dollar fell below the US93 cent handle moving as low at 0.9288. Overnight the Aussie managed to climb back above yesterday’s open taking advantage of weak US unemployment numbers to open this morning stronger at 0.9315. Heading into the weekend there is limited data out of Australia locally and with Bank holidays across Europe investors will turn to the US markets for direction.

• We expect a range today of 0.9280 – 0.9360

New Zealand Dollar:

The New Zealand dollar was one of the most volatile currencies of all the Majors on Friday as the Kiwi rallied on increased retail sales and strong business manufacturing numbers. The uptake in retail sales was driven primarily by the motor vehicle industry which grew at the quickest pace in two years. In a similarly positive light the business manufacturing index showed expansion and the higher yielding currency rallied to intraday highs of 0.8485 against the Greenback. This morning the NZD opens stronger against the USD at 0.8493 after the safe haven USD was sold off after soft unemployment data. As investors look ahead to the weekend the US markets will be used as a guide with no data out domestically and bank holidays in France and Italy.

• We expect a range today of 0.8450 – 0.8530

Great British Pound:

The British Pound has managed to recover to open at the same level (1.6685) as Thursday heading into the weekend after moving close to 4 month lows against the US dollar. The Sterling was further sold off in yesterday’s trade as concerns over the Bank of England’s decision to cut the wage growth expectations still weighed on investors. The GBP fell as low as 1.6659 however rallied after unfavourable unemployment claims numbers were released during US trade. Against the higher yielding currencies the Sterling did not manage to gain back its losses opening weaker at 1.7904 and 1.9644 against the Aussie and Kiwi respectively. Heading into the weekend onlookers will carefully watch the second estimate GDP figures for the quarter as the Bank of England’s time frame to an interest rate increase is continuously trying to be determined.

• We expect a range today of 1.7870 – 1.7950

Majors:

The Euro continues to remain flat against the Greenback opening this morning unchanged at 1.3366. Weak data from both the Eurozone and the US has marred any potential gains from either side. Early yesterday the Euro dipped after Eurostat released French and German GDP numbers. The data failed to impress showing France with a zero per cent change and Germany with a negative 0.2 per cent for the last quarter. These figures play an important part when taking a broad overview of an economies health. The Euro’s losses were turned around later during US trade when the number of people claiming unemployment insurance was shown to have increased more than expected. Heading into the weekend not much is expected out of Europe with a French and Italian bank holiday however US numbers such as industrial output and preliminary consumer sentiment should provide direction.

Data releases:

• AUD: No Data
• NZD: No Data
• JPY: No Data
• GBP: Second Estimate GDP q/q, Index of Services 3m/3m
• EUR: French and Italian Bank holiday
• USD: PPI m/m, Core PPI m/m, Empire State Manufacturing Index, TIC Long-Term Purchases, Capacity Utilization Rate, Industrial Production m/m, Prelim UoM Consumer Sentimen, Prelim UoM Inflation Expectations