By Talking Points:
- US Dollar to Find Support on an Upbeat Nonfarm Payrolls Print
- Yen May Rise if Fed QE Cutback Outlook Spooks Risk Sentiment
- New Zealand Dollar Outperforms in Otherwise Quiet Asian Trade
All eyes are on March’s US Employment report in the final hours of the trading week. Expectations suggest the world’s top economy added 200,000 jobs, amounting to the largest increase since November. Leading ISM data points to a sharp pickup service-sector hiring over the same period, arguing in favor of an upbeat outcome. Such a result is likely to help erode doubts about the continuity of the Fed’s QE “tapering” cycle, bolstering policy support for the US Dollar and driving the benchmark currency higher.
The sentiment-linked implications of Fed stimulus withdrawal represent another important dynamic. A survey of economists polled by Bloomberg shows the markets’ expectations for global economic growth have been revised sharply lower over recent weeks. If investors perceive further withdrawal of policy support for the world’s top economy as amplifying the risk of a larger global slowdown, an upbeat report may weigh against risk appetite. That may send the Japanese Yen higher as traders unwind carry trade positions funded in the perennially low-yielding currency.
The New Zealand Dollar narrowly outperformed in otherwise quiet overnight trade, adding as much as 0.2 percent on average against its leading counterparts. The move may have reflected corrective profit-taking after the Kiwi fell for a third consecutive day to hit the lowest level in two weeks against its US counterpart. An overnight advance in S&P 500 futures may have likewise helped, allowing the New Zealand unit to revel in its positive relationship with the risk benchmark courtesy of the most robust policy outlook in the G10 FX space. Indeed, traders are pricing in 118 basis points in RBNZ tightening in the 12 months ahead.
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Asia Session
GMT | CCY | EVENT | ACT | EXP | PREV |
No Data |
European Session
GMT | CCY | EVENT | EXP | PREV | IMPACT |
6:00 | EUR | German Factory Orders n.s.a. (YoY) (FEB) | 6.8% | 8.4% | Medium |
6:00 | EUR | German Factory Orders s.a. (MoM) (FEB) | 0.3% | 1.2% | Medium |
7:00 | GBP | Halifax House Prices (MoM) (MAR) | 0.6% | 2.4% | Medium |
7:00 | GBP | Halifax House Prices (YoY) (MAR) | 9.4% | 7.9% | Medium |
7:30 | EUR | German Markit Construction PMI (MAR) | - | 53.6 | Low |
8:00 | GBP | New Car Registrations (YoY) (MAR) | - | 3.0% | Low |
8:10 | EUR | German Markit Retail PMI (MAR) | - | 52.1 | Low |
8:10 | EUR | Euro-Zone Markit Retail PMI (MAR) | - | 48.5 | Low |
8:10 | EUR | French Markit Retail PMI (MAR) | - | 48.4 | Low |
8:10 | EUR | Italian Markit Retail PMI (MAR) | - | 43.1 | Low |
Critical Levels
CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
EUR/USD | 1.3527 | 1.3634 | 1.3677 | 1.3741 | 1.3784 | 1.3848 | 1.3955 |
GBP/USD | 1.6430 | 1.6520 | 1.6559 | 1.6610 | 1.6649 | 1.6700 | 1.6790 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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