By Kymberly Martin
NZ Dollar
The NZD trades a little higher this morning, at 0.7820.
There was not too much on the domestic agenda yesterday to influence the currency.
The NZD/USD traded a fairly tight range for most of the day. It gained some upward momentum in the early evening, assisted by a weaker USD in the early hours of this morning.
It trades at 0.7820 currently, well within its range of the past few months. The next line of resistance is seen approaching 0.7870. Support remains at 0.7680.
The NZD is also generally stronger on the crosses, though more range bound relative to the AUD. The NZD/EUR, at 0.6620, is now trading at the level it spiked to in April 2013. Above this, lies the Aug 2012 high of 0.6680.
Meanwhile the NZD//JPY is pushing back toward the upper end of its range of the past couple of months. It now trades at 93.50, just short of highs close to 94.00.
Today, the only domestic data scheduled for release is November building permits.
The broader direction for the NZD/USD will likely be established tonight by the release of the US labour market report.
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Majors
Many currencies experienced intra-night reversals as upward momentum in the USD ran out of steam. The NOK was the strongest performing currency, assisted by some stabilisation in the global oil price.
Market sentiment improved markedly overnight. In the backdrop of more stable commodity prices, equity markets experienced a strong rally. The move in Europe was also likely assisted by comments from ECB President Draghi that were aired overnight. These stated that ECB stimulus measures may include sovereign bond buying. Although not new news, the market is keen to see some action on this front. The Euro Stoxx50 closed up 3.6%. The S&P500 is currently up 1.5%.
Eurozone data releases overnight showed disappointing November German factory orders (-2.4%m/m vs. -0.8% expected) but a positive surprise for Eurozone retail sales (0.6%m/m vs 0.2% expected). The EUR/USD rebounded from its lows early this morning to trade around 1.1820 currently.
Overnight the Bank of England left its cash rate (0.5%) and asset purchase target unchanged as unanimously expected. The GBP/USD has rebounded this morning in the backdrop of a weaker USD, to trade at 1.5110.
The AUD received a boost early yesterday afternoon from the release of AU Nov building approvals data (7.5%m/m vs. -3.0% expected). The AUD/USD maintained a modest upward bias overnight to trade at 0.8120 currently. Today the AIG AU Performance of Construction Index will be released along with AU retail sales data.
Tonight, it will be all eyes on US December non-farm payrolls. Consensus looks for 240K, down from 321K previously. A stronger-than-expected report could reinvigorate the USD uptrend. The US unemployment rate is expected to remain steady at 6.6%. UK, German and French industrial production data will also be released.
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