Australian Dollar Outlook Feb 5

After a very quiet day during the local trading session, the AUD was quickly sold off once it fell through the USD0.8760 barrier.

The AUD traded down to USD0.8607 as bad news out of the US on jobless claims and strengthen fears out of Europe saw investors dump the riskier higher yielding currencies for the USD and the JPY. Gold had a bad night off 4.3%, while oil was off 5.5%.

Equity markets around the world plunged as did commodity prices. Investors will now nervously await tonight's US non-farm payrolls report and further news out of Europe.

The AUD is expected to trade between USD0.8650 and USD0.8760, with buying interest likely to support the currency around USD0.8600.

Majors: The USD advanced against most of the major currencies Thursday night, with the EUR falling to a seven month low on risk aversion trading.

As mentioned above, renewed fears about fiscal problems facing a handful of European countries was the main catalyst along with a worse than expected jobless claims report out of the US.

The EUR fell to $1.3754, down from $1.3906 from the previous night, while the GBP fell to $1.5767, its lowest since October.

The Bank of England and the European Central bank both kept rates unchanged, which was widely expected.

In the US, jobless claims rose to 480k in the week ending January 30, up 8000 from the prior week' upwardly revised 472k. The reading was worse  that the consensus forecast of 455k new claims.

Tonight in the US they have Non-farm payrolls data for January. The market is expecting a +20k figure, while the unemployment rate is expected to remain unchanged at 10%.

Provided by Bellfx.com.au