Australian Dollar:
The big news for the Aussie yesterday was the employment data which surprised most investors with the unemployment rate dropping to 5.2% in November and 13,900 new jobs added. Interestingly though the gains were seen in the part-time employment which added 18,100 while full-time reduced by 4,200, there was also a fall in the participation rate from 65.2% to 65.1%. Even still these figures were still much better than the expectation of no jobs added and an increase in unemployment to 5.5% and confirmed that Australia has kept unemployment at or below 5.5% since 2009 which would be the envy of other developed nations. Off the back of these figures we saw the AUD rally to 1.0490 during our session but it was kept below 1.05 following comments from RBA deputy governor Lowe about the issues caused by the strength of the AUD. Heading into North American trade the key 1.05 figure was finally broken having come close over the past week, however it could not be held as negativity from the ECB saw a risk sell off bringing us back to today’s open of 1.0480.

We expect a range today of 1.0445 – 1.0505

New Zealand Dollar:
The NZD continued to perform well yesterday after the RBNZ announcement and the accompanying hawkish statement; continued dissection of statement through our session saw 0.83 eventually broken before North American investors accelerated the gains onto an eventual high over 0.8340. These are levels not seen since late September and if it had not been for the dovish comments from Draghi we may have been pushing towards February’s highs of 0.8370. Risk fell off further after issues emerged in Italy, as cracks are starting to form in the coalition government with Berlusconi’s party threatening to pull out. Even still the NZD has held up relatively well compared its counterparts and looks to have consolidated above the 0.8300 big figure. This morning we open at 0.8320 against the USD but may struggle for further direction during our day with minimal data due for release.

We expect a range today of 0.8300 – 0.8365

Great British Pound:
As widely expected the Bank of England kept everything unchanged, voting to leave interest rates at 0.5% and the asset purchase program at 375 billion pounds. The Bank of England doesn’t provide an accompanying statement so we will have to wait for December 19 for further insights into their thinking of extending monetary easing in the future following the speech from George Osborne yesterday which reduced forecasts for a recovery in the economy. On the currency front the pound had a fairly flat day yesterday mostly trading either side of 1.6100 and following the BOE announcement not much changed, the big move came on the back of the comments from Draghi talking down European growth projections, this saw the cable fall towards 1.6050 but also helped the pound gain against the Euro with EUR/GBP currently at 0.8080. This morning GBP/USD opens at 1.6050, while GBP/AUD and GBP/NZD are both lower at 1.5315 and 1.9290 respectively.

We expect a range today of 1.5290 – 1.5349

Majors:
Overnight the ECB took the most of spotlight with the central bank leaving rates on hold as expected but delivering a more dovish tone to their monthly statement. The comments by Draghi outlined reduced growth projections for next year and also hinted at the possibility of further rate cuts to come. The interest rates currently stand at 0.75% having been dropped from 1% back in July, and inflation is projected to drop close to or below the bank’s target band which should allow for further drops sometime next year. Earlier in the evening the release of the Eurozone GDP figures saw a fall to 0.1% from the previous fall of 0.2% confirming the 17 nation bloc had re-entered a technical recession. The figure was widely expected so didn’t initially move markets much, but this combined with the hawkish ECB statement and political issues sparking again in Italy saw the EUR take a big fall against the USD. The common currency fell over a cent from 1.0375 to lows close to 1.2950 and we find it this morning trading just above that at 1.2965. Over in the US initial jobless claims for the week was slightly better than expected with only 370k filing applications for unemployment benefits, however the USD has remained fairly stable overall and we look to tonight’s monthly non-farm payrolls employment data to provide further direction.

Data releases:

AUD:
AiG construction performance, Trade balance

NZD:
No data today

JPY:
Leading index

GBP:
Inflation, Industrial production, Manufacturing production

EUR:
German industrial production

USD:
Non-farm payrolls, U.Michigan Confidence

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