Yen Climbs on BOJ Talk, DXY Flat, US Payrolls Up Next

Aussie, Kiwi Rebound; Asia-EMFX Dip; Stocks Slide 

Summary:

The Dollar Index, a popular measure of the Greenback’s value against a basket of 6 major currencies, was little changed from yesterday, settling at 103.90 (103.88 yesterday).

Intervention rhetoric from several Bank of Japan officials however lifted the Yen against the US Dollar. At the close of trade in New York, the USD/JPY pair was at 151.22, down from 151.60 yesterday. 

Japan’s Asahi newspaper reported BOJ Governor Kazuo Ueda saying that the central bank “could respond with monetary policy” if exchange rate moves affect the country’s inflation and wages in ways that are hard to ignore. 

The Dollar extended its advance against the Asian and Emerging Market currencies (EMFX). Which was keeping other Asian governments and central banks on edge. Indonesia and Turkey joined Japan in expressing worry about their weakening currencies. 

The USD/IDR pair (US Dollar-Indonesian Rupiah) settled at 15,890. Earlier in the day, the USD/IDR pair traded to a high at 15,915 before easing. 

The Greenback hit a record high against the Indian Rupee (USD/INR) at 83.4550 before slipping after the Reserve Bank of India (central bank) intervened to buy Indian Rupees. The USD/INR pair was last at 83.4375. 

Against the Aussie and Kiwi though, the Greenback eased. The Australian Dollar (AUD/USD) rebounded to 0.6585 from 0.6565 yesterday and 0.6515 Wednesday. The Kiwi (NZD/USD) edged up to 0.6022 from 0.6014. 

The Euro (EUR/USD) was flat, settling at 1.0837 (1.0838 yesterday). Sterling (GBP/USD) dipped marginally to 1.2640 from 1.2650. Eurozone Final Services PMI rose to 51.5 from 51.1, beating estimates. Germany’s Services PMI was also up, at 50.1 from 49.8 previously.

Other economic data released yesterday saw Australia’s Building Approvals fall to -1.9%, against forecasts of +3.0%. US Weekly Unemployment Claims rose 221K against forecasts of 213K and 212K previously. The US Trade Deficit rose to -USD 68.9 billion from -USD 67.6 billion. 

USD/JPY – The Greenback traded to an overnight high at 151.77 from its opening of 151.60. Remarks from several Japanese officials threatening intervention if the Yen weakens further saw USD/JPY slump to a low at 151.12 before settling at 151.22.AUD/USD – the Aussie Battler rebounded like a wounded kangaroo, jumping to an overnight high at 0.6619 before easing to close at 0.6583. The Australian Dollar saw an overnight low at 0.6563.EUR/USD – the shared currency finished flat against the Greenback, at 1.0837. In subdued trade, the overnight high recorded was at 1.0877. The Euro saw an overnight low at 1.0835 against the Greenback.GBP/USD – Sterling slipped to finish at 1.2640 against 1.2650 yesterday. The British currency traded to an overnight high at 1.2683 before easing. The GBP/USD pair traded to an overnight low at 1.2640.On the Lookout: 

Welcome to Payrolls Friday. Today’s highlight, data-wise, is the release of the US Non-Farms Payrolls report for March. Other data releases scheduled for today begin with Japan’s Household Spending for February (m/m f/c 0.5% from -2.1%; y/y f/c -3% from -6.3% - ACY Finlogix). Australia follows with its February Goods Trade Balance (f/c +AUD 10.4B from +AUD 11.027B previously). Germany kicks off European data with its German February Factory Orders (m/m f/c 0.8% from -11.3% - ACY Finlogix). 

The UK releases its March Halifax House Price Index (m/m f/c 0.1% from 0.4%; y/y f/c 1.45% from 1.7% - ACY Finlogix). France follows with its February Industrial Production (f/c 0.5% from 1.1% - ACY Finlogix). The Eurozone releases its Eurozone February Retail Sales (m/m f/c -0.4% from 0.1%; y/y f/c -1.4% from -1% - ACY Finlogix). Canada kicks off North America with its Canadian March Employment Change (f/c 25K from 40.7K – ACY Finlogix), Canadian March Unemployment Rate (f/c 5.9% from 5.8% - ACY Finlogix). 

The US rounds up today’s data releases with its March Unemployment Rate (f/c 3.9% from 3.9% - ACY Finlogix), US March Average Hourly Earnings (f/c 0.3% from 0.1% - ACY Finlogix) and the US March Non-Farms Payrolls (f/c +200K from previous +275K – ACY Finlogix).

On the Lookout: 

Apart from the March US Payrolls report, financial markets will be watching rhetoric from Federal Reserve official prior to, and after the release of the Jobs number. Traders in Asia will be monitoring any rhetoric from other central banks in the region should their currencies retreat further against the Greenback. 

Expectations for the NFP number range from +200K (ACY Finlogix and FX Street) to +212K (Forex Factory). Forecasts for the US March Unemployment Rate are all at 3.9%. Average Weekly Earnings (Wages) forecasts are all at 0.3%. It boils down to the US Payrolls number, a gain of 200K or less, say 185K to 190K will pressurize the Greenback. A gain of +225 and above will see Dollar buying. Once again, watch for revisions to previous reports, particularly if they are substantial. Get those tin helmets on and get ready to rumble. It’s Payrolls Friday!

USD/JPY – Expect another roller coaster ride in this currency pair, particularly if the Dollar trades above the152 Yen level. The Greenback closed at 151.22. Look for immediate resistance at 151.50 followed by 151.80 and 152.00. Immediate support can be found at 151.00, 150.70 and 150.40. Look for more choppy trade, likely between 151 and 152 first up. A good US Jobs report could see a test of 152.00 and the BOJ’s resolve. AUD/USD – the Aussie Battler edged higher against the Greenback to close at 0.6585. Look for immediate resistance today at 0.6610 followed by 0.6640. Immediate support can be found at 0.6550, 0.6520 and 0.6490. Look for consolidation in the Aussie in a likely range between 0.6550-0.6630. Pre-US NFP, trade the range.EUR/USD – The shared currency finished flat against the Greenback, at 1.0837. Today look for immediate support at 1.0800 followed by 1.0770. On the topside, immediate resistance can be found at 1.0880 (overnight high traded was 1.0877). The next resistance level lies at 1.0910. Look for the Euro to trade in a likely range of 1.0810-1.0880 before the US Payrolls report.  GBP/USD – Sterling dipped against the US Dollar to 1.2640 from 1.2650 yesterday. Today, look for immediate support for the British Pound at 1.2610 followed by 1.2580. On the topside, immediate resistance can be found at 1.2680 (overnight high traded was 1.2683). The next resistance level lies at 1.2710. Look for Sterling to consolidate in a likely range, pre-NFP, of 1.2620-1.2690.Happy Payrolls and trading all. A top weekend ahead. 

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