AUDUSD: The Australian dollar moved sideways in a quiet Asian session Friday as traders sat on their hands ahead of a key report on the U.S. job market overnight.
Australian bonds moved lower on both ends of the curve as a report earlier in the week of robust economic growth in the country continued to impact investors' risk tolerance.
In a data-heavy week, much of the Asian data has surprised to the upside, including a 1.2% second-quarter gross domestic product increase in Australia and strong Chinese manufacturing data. Even some reports in the U.S., which has seen a pick-up in global investor concern about its economy in recent weeks, had some strong showings, including the latest ISM manufacturing survey.
Ahead of that report, the Australian dollar gained steadily overnight, only to slide slightly during the day. One Sydney-based strategist attributed the decline to selling by a domestic Australian bank but noted, with thin volumes, there was broad reluctance to trade much before the payrolls report.
We expect a range for today in AUDUSD rate of 0.9000 to 0.9175 (Short above 0.9175, stop loss at 0.9225, target OPEN)
EURUSD: European Central Bank President Jean-Claude Trichet on Thursday announced that the central bank would continue to provide a range of emergency funding to commercial banks through the end of 2010, while also cautiously hailing stronger growth forecasts for the region.
The euro found some modest support earlier in the session after the European Union statistics agency Eurostat reported an unexpected 0.1% rise in July euro-zone retail sales after an upwardly revised 0.2% gain in June. Economists had expected a flat reading.
Final euro-zone purchasing managers index data had little market impact. The figures for August confirmed that private-sector activity in the region saw slower growth last month but still advanced at a healthy pace.
European countries should find a united position on a tussle with the United States over board seats at the International Monetary Fund, said European Central Bank President Jean Claude Trichet Saturday.
Trichet stressed he was speaking personally and that his view was not an official position of the ECB.
He was replying to a question asking him if he thought that European countries should reduce their seats on the IMF board.
The United States is pushing for Europe to cut the number of its seats on the IMF board and give some of them to emerging economies. Last month it took steps to block plans that would diminish Europe's strong position on the board.
EU finance ministers will meet in Brussels at the end of September ahead of the IMF's annual meeting Oct. 8-10.
We expect a range for today in EURUSD rate of 1.2800 TO 1.2900 (Short at 1.2890, stop loss at 1.2940, target OPEN)
USDJPY: The dollar rose Friday, extending an advance on the Japanese yen in the aftermath of stronger-than-expected U.S. payrolls data for August.
The dollar tends to weaken when risk appetite is on the rise as investors pile into equities and other assets perceived to carry a higher degree of risk. The dollar and, to a greater extent, the yen tend to rise when risk appetite falls, as investors seek out safe havens.
U.S. stock index futures and European equities jumped in the wake of the jobs data, in which nonfarm payrolls declined by 54,000 during August, less than the 150,000 forecast by economists surveyed by MarketWatch.
We expect a range for today in USDJPY rate of 84.00 to 85.00 (Long at 84.00, stop loss at 83.50, target OPEN)