AUDUSD: The Australian dollar was among the casualties of heightened risk aversion Thursday after another blow out in Italy’s bond yields sparked worries that the euro zone may be ruptured in coming months. Robust local jobs numbers helped the Australian dollar win some support but worries over Italy’s future remains the biggest driver of sentiment, sending Australian bond futures soaring.
Helping the local currency was a dip in unemployment which fell to a seasonally adjusted 5.2% in October from 5.3% the previous month. The number of employed rose 10,100, the Australian Bureau of Statistics said Thursday. Economists on average had expected an unemployment rate of 5.3% in October, with the number of employed up 7,500.
We expect a range for today in AUDUSD rate of 1.0340 TO 1.0420 (the Australian dollar was trading at US$1.0149 down from US$1.0351. Against the yen, the currency changed hands at Y77.7935, down from Y80.29).
Short AUDUSD at 1.0150
Stop loss at 1.0180
Target at 1.0110, 1.0080 and 0.9970
EURUSD: Federal Reserve Chairman Ben Bernanke on Thursday again urged Europe to act “forcefully” to stem its rolling financial crisis, and warned that the U.S. wouldn’t be able to escape the consequences of a “blow up” on the continent.
Nevertheless, caution remained. Capital Economics pointed out that Italy’s bond yields remain perilously close to the 7% level that, once breached, triggered bailouts in Greece, Ireland and Portugal. “The estimate would have to be around EUR650 billion [$880 billion] to keep Italy out of the market for the next three years. This would be almost twice the size of the combined bailouts for Greece, Ireland and Portugal agreed so far.
We expect a range for today in EURUSD rate of 1.3470 to 1.3675
Short EURUSD at 1.3600 ranges
Stop loss at 1.3630
Target at 1.3530, 1.3470 and 1.3410
USDJPY: The number of people filing applications for first-time unemployment assistance last week dropped to the lowest level in seven months, signaling progress in the feeble U.S. jobs market.
Initial claims for unemployment benefits dropped by 10,000, to a seasonally adjusted 390,000 the week ended Nov. 5, the Labor Department said Thursday in its weekly report. That was the lowest level since the week ending April 2. In the prior week, jobless claims were revised up to 400,000 from an originally reported 397,000, according to the newly released figures.
The four-week moving average of new jobless claims, a more reliable indicator of the labor market’s performance because it smoothes out volatile weekly figures, fell by 5,250 to 400,000.
Claims have now been hovering near the key 400,000 mark for seven weeks, indicating the still-weak jobs market is neither getting better nor worse. The latest decline may signal improvement, but economists believe claims must remain below 400,000 for a sustained period to signal a real turnaround.
We expect a range for today in USDJPY rate of 77.40 to 78.10 (Time to close our short position where we shorted last 77.80)
Limit BUY order for USDJPY at 77.20
Stop loss at 76.70
Target at 77.70, 78.30
