Australian Dollar
Australia’s exports exceeded imports by A$1.38 billion in November, down from a revised A$1.42 billion surplus the previous month, the Bureau of Statistics said on Thursday. With markets somewhat disappointed the Australian Dollar drifted lower from opening levels above 1.0360 to find support around 1.0320 by mid-afternoon. Also weighing on the Aussie was a decision by the People’s Bank of China to fix the Yuan to the Dollar at a lower than expected level of 6.3115 causing a decline in Asian equity markets.

[Kick off your day with our newsletter]

Heading into offshore trade around 1.0320 the Australian Dollar dropped sharply as focused switched back to Europe’s banking sector and cost of borrowing. With French 10-year bonds hitting 3.29% and concerns for Spain’s exposure to bad loans, our local unit succumbed to the erosion of risk appetite that followed. Falling to 1.0240 we open just off these lows this morning with US unemployment tonight the main risk event for the Aussie.

We expect a range today of 1.0210 – 1.0320

New Zealand Dollar
The New Zealand Dollar spent most of its local session on Thursday in range-bound trade as markets remained tentative to take a position ahead of the French bond auction scheduled that evening and Friday’s US unemployment data. Sitting primarily between 0.7860 and 0.7880, this range was broken into the European session after France’s bond sale disappointed, falling initially to 0.7810. A few hours later, a private survey of US unemployment figures released ahead of the government survey tonight saw a much larger than expected increase to the labour force.
The Greenback rallied off this news and the Kiwi was pushed momentarily below support at 0.7800. Holding right on these levels this morning, the New Zealand has made some marginal ground on its rival across the Tasman as soft trade balance figures for Australian weakened its dollar and the Kiwi currently buys 0.7616 Aussie cents.

We expect a range today of 0.7750 – 0.7850

Great British Pound
The UK’s services sector posted an impressive purchasing managers'' index (PMI) overnight of 54.0 greater than both last month’s figure of 52.1 and expectations for this month of 51.6. With the service sector accounting for more than 70% of the nation’s economic output the British pound rallied on this news and in combination with a disappointing French bond auction, it reached 15mth highs against the Euro Dollar near 0.8250 (1.2121).

Positive fundamentals from the United States however kept the Greenback strong and Sterling was not able to make such gains as it did against the Euro. Falling along with most other US counterparts, it fell to a low of 1.5470 before recovering slightly to start today at 1.5485. Slightly higher thanks to the decrease in risk sentiment, the GBP/AUD trades at 1.5100 and the GBP/NZD at 1.9840.

We expect a range today of 1.5010 – 1.5150

Majors
The Euro has fallen back to a 15 month low against the Greenback overnight as France’s borrowing costs rose at a local bond auction and a Spanish minister suggested Spain’s banks may face a higher bill for bad loans than originally thought. Falling from earlier highs around 1.2940, the single currency fell decisively through support at 1.2900 to levels around 1.2840 by the start of North American trading hours.

The United States however has started the year on a more positive note and this trend continued when the survey of non-farm payrolls conducted by private firm ADP announced an additional 325,000 new jobs last month. With this positive number preceding tonight’s government figures the USD strengthened despite a slightly softer than expected ISM Non-Manufacturing PMI. This pushed the Euro even lower to finds support at 1.2785 and the USD/JPY back above 77.00 where it trades this morning at 77.20.

Data releases:

AUD: No data due for release

NZD: No data due for release

JPY: No data due for release

GBP: No data due for release

EUR: Retail Sales m/m ; Unemployment Rate; German Factory Orders m/m

USD: Non-Farm Employment Change; Unemployment Rate; Average Hourly Earnings m/m