Dollar loiters around one-month high

Australian Dollar:

It what’s being described as the most impressive economic start to the year in more than six yesterday’s jobs report showed employers hired 14 200 new workers during the month of April. Having now created 26 000 new jobs on average each month this year the official unemployment rate of 5 .8 percent has surprised policy makers with RBA Governor Glenn Stevens giving warnings that the jobless rate was expected to rise, a warning only given as recently as May’s board meeting. Having a positive influence on the Australian dollar yesterday the higher yielding asset jumped to its highest level in more than a month when valued against its US Counterpart reaching an eventual top of 0.9393. Stronger this morning as it buys 93.71 US Cents investors will be kept busy today ahead of key inflationary numbers from China.  

• We expect a range today of 0.9340 – 0.9410

New Zealand Dollar:

Despite an abundance of offshore Central Bank activity overnight the New Zealand dollar has been successful in maintaining recent ranges when valued against its US Counterpart. Consolidating its losses from Wednesday the Kiwi has traded between a low of 0.8624 and a high of 0.8670 with the only economic release garnishing any real attention coming from The RBNZ’s deputy Governor Grant Spencer who said that housing pressures were easing, hinting that lending restrictions could be removed before years end. Opening marginally weaker this morning at a rate of 0.8641 CPI numbers today from China if stronger than expected should be supportive of a higher Kiwi.

• We expect a range today of 0.8610 -0.8670

Great British Pound:

In a move many had seen coming The Bank of England kept borrowing costs on hold overnight. With unemployment having fallen below the key 7 percent threshold and inflation appearing steady at 1.6 in March the only concern for Policy makers now appears to be the housing market which has experienced accelerated growth. Falling short of the critical 1.70 juncture when valued against its US Counterpart the Sterling has since been sold off as it opens this morning in familiar territory at a rate of 1.6930. In other moves overnight the Great British Pound has also struggled when valued against the Australian dollar (1.8064) whilst marginally stronger against the New Zealand dollar (1.9578)

• We expect a range today 1.8030 – 1.8100 

Majors:

As many expected the European Central Bank left rates unchanged at 0.5 percent overnight with the 17-nation Euro rallying to a high of 1.3992 briefly after the announcement. In a move which was short lived lows of 1.3832 quickly came into play after ECB President Mario Draghi primed investors for even looser monetary policy next month with the threat of inflation still stalking economies which are only just out of recession. Stopping short of guaranteeing the market of a June rate drop, the questions around timing have now been clearly addressed. During a session dominated by Central Bank chatter Federal Reserve Chair Janet held firm with the FOMC’s recent message hinting that the lack of growth across the housing market could shift the economic outlook raising the importance of housing data in the future. Whilst the Euro opens weaker this morning at 1.3834 the Greenback is steady against the Yen at 101.64.

Data releases

• AUD: RBA Monetary Policy Statement  
• NZD: No data today
• JPY: No data today
• GBP: Manufacturing Production m/m, Trade Balance, NIESR GDP Estimate
• EUR: Italian Industrial Production
• USD: JOLTS Job Openings, FOMC Member Kocherlakota Speaks,