AUDUSD: The Australian dollar was slightly lower late Friday as markets globally braced for the release of U.S. employment data for August, a report which could determine whether the U.S. Federal Reserve embarks on a fresh round of stimulus.
Government bonds were also subdued ahead of the payrolls report, with the local focus on next week’s policy meeting of the board of the Reserve Bank of Australia Tuesday, and second quarter economic growth data Wednesday.
The RBA is widely expected to keep its cash rate target unchanged at 4.75%, with uncertainty in the global economy and evidence of a slowdown in parts of the local economy keeping its powder dry.
Economists are looking for gross domestic product to grow 1.0%, signaling a strong recovery from the flood-affected first quarter. Still, the growth is set to be uneven with miners powering ahead while manufacturers and tourism struggle
We expect a range for today in AUDUSD rate of 1.0530 to 1.0630 (We set limit BUY order for the pair at 1.0530, stop loss at 1.0470, target at 1.0580, 1.0630 and 1.0670)
EURUSD: German Chancellor Angela Merkel’s Christian Democrats endured a fresh round of losses in regional elections Sunday, putting more pressure on Merkel at a time when she faces searing criticism at home over her handling of the euro-zone debt crisis.
Elsewhere, President Olafur Ragnar Grimsson called Sunday for a European Union probe into how the bloc could have allowed Britain and the Netherlands to put so much pressure on Reykjavik in the dispute over the failed Icesave bank.
His comments came after Icesave’s parent company Landsbanki, which collapsed at the end of 2008, announced late last week its recovered assets would be enough to repay all “priority claims” and still have 13 billion Icelandic krona (80 million euros, $114 million) left over.
That means the 3.9 billion euros ($5.6 billion) Britain and the Netherlands spent compensating 340,000 of their citizens who lost money when Icesave collapsed can be refunded without tapping into public coffers.
We expect a range for today in EURUSD rate of 1.4100 to 1.4200 (Last Friday, we set limit buy order for the pair at 1.4140 when the market was trade at 1.4360. We now decide to enter the market at the current level 1.4140 ranges, stop loss at 1.4060, target at 1.4185, 1.4220, 1.4270, and toward 1.4350.)
USDJPY: Traders have begun preparing for some punishment for the dollar after the U.S. Labor Department reported the economy added no jobs in August, feeding into expectations that the Federal Reserve will be compelled to act to boost growth. The dollar slipped against the Swiss franc, another popular haven, after the data.
Consensus is for next to no employment growth over the month with the unemployment in the world’s largest economy expected to remain 9.1%. On Thursday, the U.S. Labor Department reported initial jobless claims fell 12,000 to a seasonally adjusted 409,000 in the week ended Aug. 27, offering little hope that payrolls will be upbeat.
News the U.S. agency that oversees Fannie Mae and Freddie Mac is set to file suits against a dozen big banks, is also expected to jolt confidence ahead of the weekend. A report in The New York Times said the banks are accused of misrepresenting the quality of mortgage securities they sold at the height of the housing bubble.
We expect a range for today in USDJPY rate of 76.30 to 77.30 (We expect the pair continue further uptrend toward 77.00. )
