Daily Forex Commentary 6/9/2010

:: Australian Dollar: The resurgence in the Aussie dollar continued on Friday night with the unwinding of risk trades persisting following the release of the U.S employment report. Heading into the announcement the AUD/USD was hovering around the 91 cent mark and with fewer than expected jobs lost in the non farm sector investors immediately snapped up Aussie dollars sending it to an eventual high around 0.9170. In what looms as a big week ahead on the data front for the local unit investors will be watching price action around the 92 cent level and whether it can break above August 6 highs of 0.9220.

- We expect a range today in the AUD/USD rate of 0.9120 to 0.9220

:: Great Britain Pound: In a very volatile finish to the week's trade the Pound Sterling recovered from a European sell off to bounce back from a low of 1.5390 and finish on its highs at 1.5465 against the Greenback. An unexpected decline in U.K Services PMI initially weighed on the Cable, however with risk appetite improving and the U.S dollar weakening across the board support came late in the session. This week has several key U.K releases with the BoE Monetary Policy Statement on Thursday the major highlight. A continuation in the rally on the Aussie dollar once again weighed on the cross rate with GBP/AUD finishing the week near its lows at 1.6875.

- We expect a range today in the GBP/AUD rate of 1.6785 to 1.6885

:: New Zealand Dollar: The Kiwi continued its recent rally that has seen it jump over 3.5% from lows around 0.6965 on the first of the month posting a high above the 72 cent handle on Friday night. With little in the way of domestic data the NZD took its cue from offshore events and with negative sentiment towards the global economic environment abating somewhat the N.Z dollar benefited. Helping the NZD/USD was Friday's U.S employment report that showed a less than expected 54k jobs lost in the nonfarm sector boosting equity markets and commodity based currencies.

- We expect a range today in the NZD/USD rate of 0.7150 to 0.7225

:: Majors: The Euro held on to recent gains finishing 2% higher than its weekly low of 1.2625 at 1.2890 against the Greenback on Friday. Buoyed by recent comments from the ECB and diminishing concerns around a global double dip recession investors shrugged off a lower than expected consumer spending report from the Euro-zone focusing instead on the key U.S employment report. Economist forecasts were for the official unemployment rate to increase from 9.5% to 9.6% and the nonfarm sector to lose around 105k jobs during the month of August. Predictions for the headline unemployment rate were spot on coming in at 9.6% however it was the loss of 54k jobs in the nonfarm payrolls that caught the market somewhat by surprise triggering a relief rally on equity markets and riskier assets in general. The move lost some momentum late in the session however with USD/JPY finishing back at 84.37 and EUR/JPY at 108.85.

:: Data Releases: