Forex Today: USD extends reversal, AUD drops after jobs; ECB minutes & US data eyed

After yesterday's reversal from one-month high, sluggish US Dollar performance had been a key theme during Asian session on Thursday despite of Wednesday's strong US economic reports, record high levels for the US equity indices and rising treasury bond yields. 

Lack of sustained follow through buying interest in wake of slightly cautious comments from the Fed Chair Janet Yellen, during the second day of her testimony before the House Financial Services Committee on Wednesday, seems to be primary drivers of the greenback's retracement on Thursday.

Meanwhile, the Australian Dollar reversed mixed jobs data led early gains as further details revealed that jobs growth was solely driven by part-time jobs, with a contraction in full-time jobs. 

Against the backdrop of growing expectations for an eventual Fed rate-hike action, sooner-rather-than-later, market participants on Thursday would look forward to the US economic data featuring the release of housing starts, building permits, weekly jobless claims and Philly Fed manufacturing index. Meanwhile, ECB is scheduled to release the monetary policy meeting minutes during European trading session.

Main topics in Asia

Japanese MoF: didn’t discuss FX with US Treasury Secretary Mnuchin

Japanese Ministry of Finance (MoF) informed markets that a phone call between US Treasury Secretary Mnuchin and Japanese Finance Minister did not include a discussion on the exchange rate.

Fed’s Dudley calls stock market rally unusual

Fed’s Dudley calls the stock market rally unusual given the enormous rise in the policy uncertainty. Dudley sees Fed raising rates a little further in months ahead, as the inflation is seen moving towards Fed’s 2% objective.

EUR/USD jumps above 1.06 as the Treasury yields drop

The EUR/USD pair jumped to a session high of 1.0624 this Thursday morning on the back of a drop in the treasury yields.

Australian Jan employment headline upbeat, full-time jobs suffer sharp fall

Australia employment change s.a. came in at +13.5k in January, above forecasts of +10k and prior of 13.5k, with the unemployment rate s.a. at 5.7% vs forecasts of 5.8% and 5.8% last.

Key focus for the day ahead

GBP/USD - Rejected again at 1-hour 50-MA, is the pair overpriced?

GBP/USD fails again to take out the 1-hour 50-MA, marking the third failure at the moving average in the last twelve hours.

US and UK key data points, divergence of inflationary environment - ANZ

Analysts at ANZ noted that US Jan CPI beat expectations overnight at 2.5% y/y - its highest increase since March 2012.

S&P 500 - break of 2340-2346 would add weight to our bullish view – Natixis

Natixis Technical Research note sees a potential for a rally to 2360-2367 post a break above 2340-2346 levels.