Australian Dollar:
The Aussie experienced a bit of a roller coaster ride last week, trading up around 1.0380 early in the week before disappointing Chinese and US manufacturing numbers sent commodities and the Aussie lower, eventually bottoming out around 1.0225 on Thursday. On Friday the slow move back up began before much better than expected US employment numbers increased risk appetite and saw us move up to around the middle of last week’s range to trade at 1.0305 at this morning’s open. This week is shaping up to be a busy one locally with retail sales today and employment on Thursday, but most of the focus will be on the RBA rate announcement tomorrow. Investors seem to be split on whether the RBA will lower rates or remain on hold, with recent local inflation numbers and offshore developments providing the central bank with some scope to cut but they may hold their hand until next month.

We expect a range today of 1.0275– 1.0345

New Zealand Dollar:
After a sharp selloff on Thursday, the Kiwi managed to grind its way back up over 0.85 on Friday before holding firm while investors awaited the US employment numbers. With US unemployment dipping to a four year low of 7.5%, investors’ appetite for riskier assets came back to life, with S&P 500 breaking above 1,600 and our currency pushing back towards 0.8550. Strong moves were also seen against the Yen as NZD/JPY moved towards 84.65, while AUD/NZD is also looking under pressure and the key 1.2000 level may be eyed this week if key data releases move in our favour. In regards to data, this week sees local employment data along with Australia employment and Chinese inflation numbers. Meanwhile we open this morning at 0.8535.

We expect a range today of 0.8485– 0.8565

Great British Pound:
The pounds recovery continued last week, climbing from 1.5460 at the beginning of the week to close at 1.5570 on Friday night. Some solid local data releases in the form of PMI manufacturing, construction and services all helped lift confidence in the economy and provide investors with enough evidence that the BOE won’t need to ease any further when they meet later this week. Friday night also saw the release of US employment numbers, which beat forecasts and lifted risk appetite which in turn saw the cable move higher towards 1.5585 and have some eyeing 1.5600 as a possible target. Meanwhile the pound lost some ground against the south pacific crosses, which both benefitted more from Friday’s risk appetite, and we currently find GBP/AUD at 1.5105 and GBP/NZD at 1.8225.

We expect a range today of 1.5070– 1.5135

Majors:
The big release on Friday night was the US employment numbers, with non-farm payrolls printing at 165k which was above expectations of 150k. Of particular note in this release was that the previous months’ numbers were revised up, with March revised to 138k and February to 332k, this in turn helped pull the unemployment rate down to 7.5%, which is a four year low. This announcement saw a strong move up in the greenback, particularly against the Yen, as investors began re-evaluating forecasts for when the current easing policies of the Fed may be wound back. USD/JPY gapped higher on the announcement, as it easily broke through 99, to where it currently trades at 99.15. Meanwhile the Euro has recovered somewhat from its sharp fall on Thursday night, pulling itself back up above 1.31. On Thursday night the ECB confirmed what many had suspected; that they would be dropping the interest rate for the shared currency area from 0.75% to 0.5%, but it was the dovish tone in the statement that saw the Euro fall below 1.3050. However on Friday night, some comments from an ECB member hosing down elements of the release, in particular a suggestion of negative deposit rates, saw investors change their tune and pull the Euro back up to its current open of 1.3120. Looking ahead tonight sees some key European data releases in the form of Eurozone PMI and Retails sales.

Data releases:

AUD:
TD Securities inflation, Retail sales, ANZ job advertisements

NZD No data today

JPY:
Public holiday

GBP New car registrations

EUR:
Eurozone PMI, German PMI, French PMI, Eurozone retail sales, Sentix investor confidence

USD:
No data today

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