Yen Leading Ahead of Anticipated NFP (Opening Comment)


The Yen has been the prime beneficiary overnight on the pullback in risk appetite, while Kiwi suffers the most. The USD has also fared extremely well over the past few days and it looks as though there is some momentum building for the buck. In Japan, the unemployment rate came in better than expected, but this has failed to materially factor into price action. Meanwhile, in Australia, inflation index readings came in at their slowest pace in 6 years to suggest that the RBA may keep rates on hold at their upcoming meeting. The markets are also cuing off of earlier comments from Fed Lockhart who said that the near-term economic strength may not last. Looking ahead, the European session is light with the only notable releases coming from UK Nationwide (0.7% expected) at 6:00GMT, UK construction PMI (48.1 expected) at 8:30GMT and Eurozone PPI (0.4% expected) at 9:00GMT. The clear focus for today’s trade comes later in the day with the much anticipated US NFP release. Given the recent ADP, initial jobless claims and ISM, many are now expecting a weaker number, which could spark another round of carry liquidation. Expectations for NFP have centered on a -180k print. US equity futures point to a lower open, while commodities are mixed with gold slightly firmer and oil lower.

Written by Joel Kruger, Technical Currency Strategist for
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