Commodity currencies such as the Australian, the New Zealand and
the Canadian dollars weakened against their major currencies in the
Asian session on Friday amid rising risk aversion, as investors
turned cautious ahead of the release of the U.S. Labor Department's
closely-watched monthly jobs report due later in the day.
The monthly jobs data could have a significant impact on the
outlook for whether the U.S. Federal Reserve will raise interest
rates at its meeting later this month.
Economists expect the monthly jobs report to show an increase of
about 220,000 jobs in August following the addition of 215,000 jobs
in July. The unemployment rate is expected to dip to 5.2 percent
from 5.3 percent.
Meanwhile, oil prices dipped as investors remain cautious ahead
of U.S. jobs data later in the day which is expected to provide
clues on the timing of Federal Reserve's decision on rate hike.
The U.S. oil rig data due later today is also awaited. Any drop
in rig numbers is likely to bolster the commodity.
Also, the weekly crude stockpiles report from the Energy
Information Administration released Wednesday showed that crude
stockpiles in the U.S. increased 4.7 million barrels in the week
ended August 28, more than the increase expected by analysts.
Crude oil for October delivery are currently down $0.19 at
$46.56 a barrel.
Moreover, some economists expect the RBNZ to cut its official
cash rate by at least 25 basis points at its forthcoming meet on
September 10th and a further cut in the fourth quarter. The plunge
in Global dairy prices, weaker than expected GDP growth and fall in
core inflation, has triggered expectations for a rate cut.
The markets in China remain closed on Friday for the Victory Day
holiday. They will re-open on Monday.
Thursday, the Australian, the New Zealand and the Canadian
dollar rose against their major rivals after European Central Bank
president Mario Draghi said he is ready to pump more stimulus to
jump-start the Eurozone economy. Meanwhile, the European Central
Bank left interest rates unchanged.
The Australian dollar rose 0.19 percent against the U.S. dollar,
0.43 percent against the yen and 0.63 percent against the euro. The
NZ dollar rose 0.72 percent against the U.S. dollar, 0.60 percent
against the yen and 1.71 percent against the euro. The Canadian
dollar rose 0.66 percent against the U.S. dollar, 0.34 percent
against the yen and 1.68 percent against the euro.
In the Asian trading, the Australian dollar fell to nearly a
6-1/2-year low of 0.6961 against the U.S. dollar and a 2-year low
of 0.9198 against the Canadian dollar, from yesterday's closing
quotes of 0.7017 and 0.9245, respectively. If the aussie extends
its downtrend, it is likely to find support around 0.62 against the
greenback and 0.90 against the loonie.
Against the yen and the NZ dollar, the aussie dropped to nearly
a 2-week low of 83.05 and a 9-day low of 1.094 from yesterday's
closing quotes of 84.25 and 1.0965, respectively. The aussie may
test support near 81.00 against the yen and 1.07 against the
kiwi.
The aussie edged down to 1.5991 against the euro, from
yesterday's closing value of 1.5845. On the downside, 1.65 is seen
as the next support level for the aussie.
The NZ dollar fell to a 2-day low of 75.83 against the yen, from
yesterday's closing value of 76.82. On the downside, 72.00 is seen
as the next support level for the kiwi.
Against the U.S. dollar and the euro, the kiwi dropped to 0.6356
and 1.7512 from yesterday's closing quotes of 0.6397 and 1.7372,
respectively. If the kiwi extends its downtrend, it is likely to
find support 0.61 against the greenback and 1.85 against the
euro.
The Canadian dollar fell to 1.3221 against the U.S. dollar and
90.23 against the yen, from yesterday's closing quotes of 1.3178
and 91.09, respectively. If the loonie extends its downtrend, it is
likely to find support around 1.33 against the greenback and 87.00
against the yen.
Against the euro, the loonie edged down to 1.4714 from
yesterday's closing value of 1.4644. The loonie may test support
near the 1.54 region.
Meanwhile, the safe-haven currencies such as the yen and the
Swiss franc rose against its major rivals.
The yen rose to a 4-month high of 132.77 against the euro and
nearly a 4-month high of 181.77 against the pound from yesterday's
closing quotes of 133.54 and 183.07, respectively. If the yen
extends its uptrend, it is likely to find resistance around 130.00
against the euro and 178.00 against the pound.
Data from the Ministry of Health, Labor and Welfare showed that
Japan's base wages increased at the fastest pace in almost ten
years in July. Regular pay grew 0.6 percent in July from last year,
the biggest since November 2005. This was the fifth consecutive
rise in base pay.
Against the U.S. dollar, the yen advanced to a 2-day high of
119.29 from yesterday's closing value of 120.06. The yen may test
resistance near the 115.00 region.
Against the Swiss franc, the yen edged up to 122.79 from
yesterday's closing value of 123.33. On the upside, 121.00 is seen
as the next resistance level for the yen.
The Swiss franc rose to a 4-day high of 1.0804 against the euro,
from yesterday's closing value of 1.0827. The franc may test
resistance near the 1.06 region.
Against the pound and the U.S. dollar, the franc edged up to
1.4794 and 0.9709 from yesterday's closing quotes of 1.4848 and
0.9733, respectively. If the Swiss franc extends its uptrend, it is
likely to find resistance around 1.45 against the pound and 0.95
against the greenback.
Looking ahead, German factory orders for July is due to be
released at 2:00 am ET.
Swiss CPI and Germany's construction PMI, both for August are
also slated for release in the European session.
In the New York session, Canada unemployment data and Ivey's
PMI, U.S. non-farm payrolls report and unemployment data, all for
August, are set to be published.
At 8:10 am ET, Federal Reserve Bank of Richmond President
Jeffrey Lacker will deliver a speech titled "The Case Against
Further Delay" at the Retail Merchants Association in Richmond.
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