The pair is likely to trade with a firm undertone following a spike in yields on Treasury notes amid concerns that the Fed would end the ultra-loose monetary easing at earlier than expected timing. Yields on Treasury’s 10-year notes surged seven basis points to 1.91% on Thursday after the minutes of the December 11-12 meeting showed that several” Fed members “thought that it would probably be appropriate to slow or to stop purchases well before the end of 2013.” Investors now wait for the release Friday of non-farm payroll for implications for the U.S. economy and monetary policy. U.S. non- farm payrolls are forecast to have increased by 150,000 in December following +146,000 rise in the previous month. Meantime, data from ADP Research Institute showed a 215,000 increase in employment, the largest since February. Investors will also watch closely developments on talks on U.S. debt ceiling after treasury has announced that the U.S. has already reached the $16.4 trillion debt ceiling but can avoid breaching that ceiling for some weeks by various cash management steps until the ceiling must be increased by legislation. The rate moved from Y86.77 to 87.33 on Thursday.
EasyForexNews Research Team