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Daily Forex Overview

Fri, Nov 6 2009, 08:50 GMT
by Raivis Zile

Dukascopy Swiss FX Group

Previous session overview

Major currencies are stalled in a holding pattern Friday, as cautious investors looked toward Friday's U.S. jobs data, seen as a key gauge of economic health.

Yesterday, the Federal Reserve kept interest rates at a record low range of zero to 0.25%. The Fed also repeated its intention to keep interest rates "exceptionally low" for "an extended period" as long as inflation expectations are stable and unemployment fails to decline.

The possibility of better-than-expected figures lifting the dollar, however, could not be ruled out, dealers said. A separate employment report released Wednesday by payroll giant Automatic Data Processing, Inc. showed the pace of private sector job losses easing to 203,000 in October, while a revised estimate showed 227,000 jobs lost in September, less severe than the 254,000 initially reported.

Elsewhere, the euro stood at JPY134.86 compared to JPY135.00 late Thursday in New York.

The Euro continued to find strength on dips as US stocks soared and the ECB was relatively upbeat at their ECB meeting were they held rates at 1.0%. The pair failed to track the gains completely on Wall Street as the market pauses ahead of the US Unemployment data tonight.

Sterling increased against the dollar after the Bank of England expanded its debt-buying program by less than predicted. As other central banks, UK policy makers kept interest rates at record lows of 0.50% and increased asset purchases to 200 billion pounds, 25 billion pounds less than forecast, citing signs of economic recovery taking hold.

The Australian dollar climbed Friday buoyed by upbeat comments on the economic outlook from the Reserve Bank of Australia and strength in regional equity markets.

Market expectation

Major currencies are stalled in a holding pattern Friday, as cautious investors looked toward Friday's U.S. jobs data, seen as a key gauge of economic health.

The payrolls data are expected to show an easing in the number of jobs lost, with 175,000 jobs shed in October compared with 263,000 lost in September, according to economists.

If the numbers come in as expected, the euro could shoot toward USD1.50, said several analysts.

For EURUSD resistance seen placed from around the Asian high at USD1.4884, with interest extending through tech resistance at USD1.4890 and USD1.4900 (61.8%/76.4% USD1.4918/1.4845). Above the figure and resistance ahead of USD1.4920 is back in focus with stops remaining in place on a break above. Traders have suggested that a weekly close above USD1.4900 targets USD1.5064.

GBPJPY tracking EURJPY lower as some players sell on view U.S. nonfarm payrolls later may bring negative surprise, sending risk assets lower; but given GBP-positive relief that BOE did not expand liquidity-boosting asset purchase scheme more than expected overnight, GBPJPY could continue on general upward trend next week, particularly if global share markets extend gains, says analysts. Says GBPJPY could rise to JPY153.00 next week building off this week's upward trend; meanwhile, while cross last down at JPY150.22 from intraday high JPY150.80, still up nearly 4.5 yen from week's low marked Monday at JPY145.80.

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Published on  Fri, Nov 6 2009, 10:43 GMT