Daily Forex Overview

Previous session overview

The US dollar rose broadly against most currencies on Friday as data showed the United States continued the bleeding of job losses in March, with employers cutting 663,000 jobs in March, driving the jobless rate to 8.5 percent, the highest since 1983

In earlier New York trading, the single currency dipped to as low as USD1.3365 against the dollar after the release of U.S. jobs data but the reversal in U.S. stock markets encouraged investors to buy more risky assets and euro ended up higher at USD1.3484 in late U.S. session, posting a 1.9 percent gain over the week.

Sterling soared against other major currencies on Friday, hitting a seven-week high against the US dollar, after a higher-than-expected reading in service sector data.

The yen weakened against the dollar and euro in Tokyo Monday as overseas hedge funds and short-term investors sold the unit on the view that it's losing popularity as a safe-haven currency.

The Canadian dollar weakened for the first day in four ahead of a government report that showed the unemployment rate in the US rose to the highest in a quarter century.

The Australian dollar ended marginally higher Monday, in choppy trading, as nervous traders adopted a careful approach ahead of Tuesday's much awaited Reserve Bank of Australia monthly policy meeting.

Market expectation

The euro is gaining against the dollar and yen Monday as investors worry less about the global economy.

Currency traders are taking on more risk given recent economic data that indicates signs of stabilization, global policy initiatives and the Group of 20 stimulus package announced this week - as well as the rebound in commodities and equities markets.

Stronger sales into Europe took GBPUSD back below USD1.4900, easing it to USD1.4887, currently trading around USD1.4900. Bids seen placed between USD1.4885/80, a break to allow for a deeper move toward USD1.4850 ahead of USD1.4835/30. Resistance remains toward USD1.4950, with interim interest noted at USD1.4930/35. Above USD1.4950 and rate can push on toward USD1.4980/85 ahead of USD1.5000. Offers noted around this latter level, with some suggestion of exotic interest, with stops above.

EURUSD has retained an underlying firm tone into early European trade, though able to pull back to USD1.3550 where it is currently finding demand interest. A break below here can open a deeper move toward USD1.3530 ahead of stronger interest between USD1.3510/00. Offers remain in place between USD1.3580/85 with European offers noted around USD1.3600.

Economists are split on the likely outcome of Tuesday's Reserve Bank of Australia meeting, with a slim majority favoring another pause and the remainder looking for a 50 basis point easing to 2.75% from the current 3.25%.

The board's decision will be crucial for signaling a fresh direction for both the local currency and interest rate futures, analysts said.

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