By Kymberly Martin
The USD index pushed a little higher this morning as the EUR weakened. The AUD and NOK have been the weakest performing currencies over the past 24-hours.
The USD index (DXY) pushed its nose above 100.50, in the early hours of this morning, its highest level since March 2003. The market now sees a 14 December Fed hike as virtually a done deal (93% priced). This view was corroborated by Fed’s Bullard yesterday. He was quoted as saying you would need to have some sort of surprise at this point for the Fed not to hike next month.
The WTI oil price spiked higher early this morning to USD46.40 from USD45.10, as Russia's energy minister expressed optimism that OPEC will reach a deal on 30 November. However, the move proved short-lived, and was not sufficient to change the fortunes of the oil-linked NOK. It has declined about 0.8% versus the USD since this time yesterday, to 8.4850.
The AUD/USD has been under pressure since last evening. From afternoon highs above 0.7560, it now trades at 0.7490, having broken through the 200-day moving average at 0.7512. Support may now be encountered at September lows near 0.7440. The test for the currency today will be the release of the AU labour market report. Our NAB colleagues anticipate employment to rise 20k in October. They expect the unemployment rate to be steady at 5.6%, given a 0.1% rise in the participation rate. This is marginally stronger than consensus expectations.
The NZD/USD traded down to 0.7040 early this morning, but has subsequently returned to 0.7080. Near-term support remains at the 200-day moving average of 0.7020.
On the crosses, the NZD/AUD has provided the most striking move over the past 24-hours. From 0.9390 early yesterday evening, the cross is now approaching 0.9460. The primary determinant of trading on the cross today will likely be the release of the AU labour market report, as NZ data releases are of only 2nd tier significance.
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