Australian Dollar
The Australian Dollar started its local session at lows yesterday, trading down at 1.0040 early on. Employment figures soon provided some relief and, with a net gain of 15,500 jobs and a drop to 4.9% overall unemployment, the Aussie subsequently rallied through 1.0100. A disappointing rise in Chinese imports however weighed on the local unit and with expected demand for Australian exports lessening, the Aussie found itself back near support at 1.0080. Not to be deterred, the markets chose to focus on the recent positives and a push higher was later capped at 1.0140 as sentiment surrounding Europe increased marginally. Taking a tumble late in the North American session, equities and risk were hit by a release by JP Morgan, reporting a $2 billion loss in bad trades over the past six weeks and another potential $1 billion is second quarter losses. Dipping to support at 1.0050 the Aussie now trades at 1.0060 ahead of Chinese CPI figures today.

We expect a range today of 1.0000 – 1.0110

New Zealand Dollar
The New Zealand Dollar limped out of the starting gates yesterday morning as the Business NZ Manufacturing Index reported a 48.0 in contrast to the previous reading of 53.8, falling below the 50.00 mark which signals a contraction in the sector. Support at 0.7830 held for the Kiwi however and a rally to 0.7885 later ensued following better than expected Australian employment data, the flow on effect creating demand for the Kiwi. Heading offshore, improved sentiment towards Greece helped demand further and eventual highs near 0.7900 were founds before a fall lower on Wall Street nerves sees the Kiwi trade this morning at 0.7840. A drop below 5% in Australian unemployment weighed upon the NZD/AUD however and the initial market reaction saw the local unit drop near 0.7780. Paring some of these losses it opens today at back closer to 0.7800.

We expect a range today of 0.7800 – 0.7880

Great British Pound
The Bank of England left its official bank rate unchanged at 0.5% as well as its asset purchasing program at 325 billion when the members of the Monetary Policy Committee joined for their monthly meeting last night. After previously witnessing a 0.9% increase in manufacturing production throughout April markets rallied upon the release recovering from levels just below 1.6100 to highs near 1.6180. Failing to maintain gains in an environment that is still wary of an economy in recession and uncertainty on the mainland of the continent, a slip to 1.6130/40 takes us to opening levels this morning. Better than expected Australian employment hindered early gains in the cross, although GBP/AUD pushed back to trade above 1.6000 this morning. A quieter New Zealand economic calendar kept volatility lower in this cross rate and it opens at similar levels today of 2.0570.

We expect a range today of 1.5970 – 1.6100

Majors
Market concerns have eased somewhat over Greece’s recent political turmoil as confirmation came from a European Commission official that the indebted nation’s financial ‘needs are covered’. Alleviating concerns over a potential default on Greece’s next debt payments, this helped the Euro climb from technical support at 1.2925 to approach 1.2980. Also giving the shared currency a boost were encouraging words from technocrat leader of the Greek socialist party, Evangelos Venizelos, reporting positive coalition talks with a smaller left-wing party as a ‘good omen’. A pull back in US equity markets late in the day has seen the Greenback rally and thus the Euro is positioned lower to kick-off the final day of trade this week, at 1.2930. The USD/JPY is higher this morning, even after a rise in exports contributes to an increase in the Japanese current account surplus. The pair trade this morning at 79.90.

Data releases:

AUD: No data due for release

NZD: FPI m/m

JPY: M2 Money Stock y/y

GBP: PPI Input m/m

EUR: German Final CPI m/m

USD: PPI; Prelim UoM Consumer Sentiment; Prelim UoM Inflation Expectations

CNY: CPI y/y