07 Jun 2015

US Non-Farms beat forecast

United States Dollar: Friday saw the latest Non-Farm Payrolls data from the States with another strong result seen. Expectations of a circa 220k increase in employment were smashed as May printed 280k. Cable had been trading at 1.5340 before the release dropped to briefly trade under 1.52 in the immediate aftermath however has recovered some of the lost ground and currently sits at 1.5295. Holders of USD will have also been encouraged that the accompanying wage growth data also beat expectations however the one fly in the ointment was the unemployment rate ticked up to 5.5%. All of the above adds weight to the argument that the Fed will raise rate before the end of the year with most people split between a September and December lift-off date. Top tier data from the America this week includes Retail Sales, PPI and Consumer Sentiment data.

We expect a range today in the GBP/USD rate of 1.52 – 1.5340

Euro: Greece moved one step closer to the Euro-door on Friday as it missed a €300m loan repayment due to the IMF. Alex Tsipris’ Syriza government utilised a clause in IMF lending t’s and c’s that allows countries with multiple payments due in one month to bundle them together and be paid at the end of the month. The last country to exercise this option was Zambia in the mid 1980s. With several further debt obligations needing to be met in early July it appears a Grexit could finally occur in early July….however how many times have we heard that in the past?!? Expectations are that some sort of funding will be agreed to tide Greece over however expect some volatility as the months goes on. EUR/USD currently trades at 1.1175 and GBP/EUR sits at 1.3670.

We expect a range today in the GBP/EUR rate of 1.3590 to 1.3760

Aussie and Kiwi Dollars: AUD/USD and NZD/USD mirrored cables drop on Friday as the commodities were sold off on the back of the better than forecast employment data from America. AUD/USD trades at .7645 and NZD/USD .7060 with further falls expected should the end-of-week US data print better than forecast and more bad news emerge from Greece. Business confidence data from Australia is released overnight and the latest RBNZ rate statement is due Wednesday night. GBP/AUD has fallen below 2 to sit at 1.9980 and GBP/NZD is at 2.1610

We expect a range today in the GBP/AUD rate of 1.9910 to 2.0060

We expect a range today in the GBP/NZD rate of 2.15 to 2.17

Data Releases

AUD: NAB Business Confidence

EUR: No data

GBP: No data

NZD: No data

USD: No data

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