Investors look towards US employment, ahead of extended break

Australian Dollar:

The Australian Dollar struggled through trade yesterday maintaining an 80 point range between 0.7585 and 0.7665. Buoyed by a stronger than anticipated Chinese Manufacturing report the AUD rallied to intraday highs of 0.7663 before edging lower and bouncing off supports at 0.7590. Demand for the AUD has dampened as global commodity prices continue to fall adding downward pressure to any relief rally. With liquidity thinning into the long weekend technical supports come into play and we expect the Aussie to hold onto levels above 0.7590 in the lead up to US Non-Farm Payrolls. Domestic Trade Balance numbers will guide direction through Thursday and a poor read may undermine current ranges. A substantial move below 0.7600 could force speculators to reassess positions and prompt a run of AUD shorts towards psychological support at 0.75.

• We expect a range today of 0.7510 - 0.7810

New Zealand Dollar:

Touching a low of 0.7390 in the early evening when valued against its US Counterpart the New Zealand dollar was initially weighed down following the latest Global Dairy Trade auction which showed the prices of dairy products declined on average by 10.8 percent. Despite increased dairy supply the currencies move lower proved to be short-lived with disappointing macro developments from the US triggering a fall in the value of the world’s reserve currency. Opening virtually unchanged this morning at a rate of 0.7452 the main drivers this evening will once again come from the United States in the form of trade and employment figures.

• We expect a range today of 0.7420 – 0.7490

Great British Pound:

Britain’s economic outlook received a boost overnight following the release of a manufacturing PMI Index which showed manufacturers had expanded production and output last month. With the Index climbing to an eight month high of 54.4 during March, new orders gathered pace as did the number of people employed. Bouncing from earlier lows of 1.4738 when valued against its US Counterpart the Great British Pound opens marginally stronger when valued against the Greenback this morning at a rate of 1.4820. Meanwhile against the Australian dollar (1.9503) and the New Zealand dollar (1.9899) the Sterling is also stronger.

• We expect a range today of 1.9460 – 1.9550

Majors:

The U.S Dollar relinquished gains made earlier in the week as softer than anticipated manufacturing and employment data dented expectations the Fed will bring forward its initial rate adjustment. ISM manufacturing PMI and ADP Non-Farm Employment Change reports both missed the mark printing below estimate and forcing investors to square positions leading into Fridays Non-Farm Payroll account. The Euro edged back above 1.0750 after improved French, German, Italian, Spanish and Eurozone Manufacturing PMI prints proffered signs the wider economy is beginning to turn. The Euro has seen a string of stronger data sets of late overshadowed by concerns surrounding Greek liquidity, a drag that continues to weigh on the 19 nation currency union. With no agreement on reforms reached thus far an 11th hour deal looks likely as the deadline for the next 240 billion Euro bailout tranche is fast approaching. Attentions now turn to US Trade balance and unemployment claims in the lead up to Friday’s NFP print while European markets will look to the ECB’s policy meeting minutes for direction into the Easter long weekend. Note thin liquidity throughout this period could prompt volatility should Friday’s non-farm payroll read miss the mark.

Data releases

• AUD: MI Inflation Gauge m/m and Trade Balance
• NZD: ANZ Commodity Prices m/m
• JPY: 10 Year Bond Auction and Monetary Base y/y
• GBP: Construction PMI
• EUR: French 10 Year Bond Auction and ECB Monetary Policy Meeting Accounts
• USD: Trade Balance, Factory Orders m/m and Unemployment Claims.