Today's Currency Movers 5 Day Change

Within the past 5 trading days the GBP has underperformed against the majors; the moving factor for the GBP drop is the market belief that U.K. interest rates will stay low for a long time. The GBP market is now adjusting to expectations that monetary policy may stay accommodative for longer, which should soften GBP over the short term.

The USD, over the last 5 trading sessions, is seeking direction ahead of tomorrow’s widely anticipated U.S. jobs report. Since any rate hike is “data dependent”, the USD market has traded mixed against the majors. The key economic data, apart from tomorrow’s NFP, is ISM non-manufacturing PMI, which is expected to come in at 58.1. A strong employment component of this report along with a solid ADP employment report released yesterday has been propping up the USD against the JPY and the GBP.

The AUD has been the biggest winner so far this week and the strongest in the G10 currencies over the past month. The RBA left rates unchanged at 2%; the RBA statement maintained a neutral message although the board did recognize that macro conditions are firming up and that the economy is adjusting to the commodities sell off.



GBPUSD, Daily (Updated)

After a series of disappointing U.K. data, today’s UK November services PMI beat forecasts in rising to 55.9 in the headline balance, up from 54.9 in October. The improved PMI numbers are helping to support the pair in the short term. GBPUSD price, after Wednesday’s big sell off, reached my first target (1.4960); however, failed to touch target 2 (1.4890) by just a few pips. Given that this week is still filled with scheduled market moving events i.e. U.S. Fed Speak, Friday NFP, which should create wide price swings, supports my view to look for an opportunity of strength to sell into around the 1.5170 – 1.5225 zone for another attempt at the 1.4890 target.





AUDUSD, Daily (Updated)

The AUDUSD moves higher in the wake of the RBA, holding steady rates at 2%, as widely anticipated. The economic outlook according to the board at the RBA , are that the “prospects for an improvement in economic conditions had firmed.” As for the currency, they noted the AUD is “adjusting to significant declines in key commodity prices.” Technically, a measure move from the September lows (0.6940) to October highs (0.7380) looks to be in play, since price continues to extend the advance from the November retrenchment lows (0.7015). If price can hold above the FE 61.8% (daily) near 0.7290, this could open up the possibility for a re test of the October highs (0.7360) with 0.7450 as the extended target.