Forex: Aussie and NZ Dollars Rise on China Data, US Jobs Report on Tap
Talking Points:
Aussie and NZ Dollars Correct Higher, Aided By Strong Chinese Trade Figures
Quiet European Calendar Puts the Spotlight on October’s US Labor Market Data
US Dollar to Rise if Payrolls Surprise to the Upside, Boosting Fed QE Taper Bets
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Currency markets oscillated in narrow ranges overnight, digesting yesterday’s surge of volatility in the wake of an unexpected ECB interest rate cut and stronger-than-expected US GDP data for the third quarter. The Australian andNew ZealandDollars corrected cautiously higher having suffered outsized losses at the hands of risk aversion yesterday, aided by an impressively better-than-expected Chinese Trade Balance report.
The economic calendar is broadly uneventful in European hours, with only second-tier releases due to cross the wires. This is points the spotlight squarely on October’s US Employment data. Expectations call Nonfarm Payrolls to produce a 120,000 increase, marking the smallest gain in three months. The Unemployment Rate is expected to rise for the first time since May, edging to 7.3 percent.
Traders continue to view US economic data in terms through the prism of Fed monetary policy expectations as they attempt to nail down the timing of the first cutback in the size of the central bank’s QE3 asset purchases. With that in mind, a soft result is likely to broadly weigh on the US Dollar as the baseline forecast for the beginning of stimulus reduction is pushed further out into the future. An upside surprise stands to yield the opposite effect.
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Asia Session:
GMT | CCY | EVENT | ACT | EXP | PREV |
0:30 | RBA Statement on Monetary Policy | - | - | - | |
2:37 | CNY | Trade Balance ($) (OCT) | 31.01B | 24.80B | 15.21B |
2:37 | CNY | Exports (YoY) (OCT) | 5.6% | 1.7% | -0.3% |
2:37 | CNY | Imports (YoY) (OCT) | 7.6% | 7.4% | 7.4% |
Euro Session:
GMT | CCY | EVENT | EXP/ACT | PREV | IMPACT |
6:45 | Unemployment Rate s.a. (OCT) | 3.2% | 3.2% | Medium | |
6:45 | CHF | Unemployment Rate (OCT) | 3.1% | 3.0% | Medium |
7:00 | German Trade Balance (€) (SEP) | 15.4B | 13.1B | Medium | |
7:00 | EUR | German Current Account (€)(SEP) | 15.0B | 9.4B | Medium |
7:00 | EUR | German Exports s.a. (MoM) (SEP) | 0.6% | 1.0% | Low |
7:00 | EUR | German Imports s.a. (MoM) (SEP) | 0.4% | 0.1% | Low |
8:15 | CHF | Retail Sales (Real) (YoY) (SEP) | - | 2.4% | Medium |
9:30 | Visible Trade Balance (£) (SEP) | -9200 | -9625 | Medium | |
9:30 | GBP | Trade Balance Non EU (£) (SEP) | -4000 | -4351 | Low |
9:30 | GBP | Total Trade Balance (£) (SEP) | -2700 | -3320 | Medium |
9:30 | GBP | Construction Output s.a. (MoM) (SEP) | 1.5% | -0.1% | Low |
9:30 | GBP | Construction Output s.a. (YoY) (SEP) | 8.2% | 4.0% | Low |
Critical Levels:
CCY | SUPP 3 | SUPP 2 | SUPP 1 | Pivot Point | RES 1 | RES 2 | RES 3 |
1.2949 | 1.3182 | 1.3301 | 1.3415 | 1.3534 | 1.3648 | 1.3881 | |
1.5866 | 1.5970 | 1.6034 | 1.6074 | 1.6138 | 1.6178 | 1.6282 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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