Review
The past 24 hours have been characterised by consolidation.
– USD has strengthened against majors, and particularly USDJPY and EURUSD were affected.
– Rising momentum in Scandies.
– The yield levels among majors are more or less unchanged.
– Crude oil (WTI) fell to a level below USD 100 for the first time since July.
Focus today will be on the release of non-farm payroll data at 14:30.
An increase of 180,000 new jobs is expected. If the job report show a figure below 165,000, there is a big risk that the market will have a negative interpretation of the report. In that case, market players will allow for a higher probability that the Fed will not begin its scaling down of QE until some later time in 2014, which would again put downward pressure on US yields, and hence result in negative pressure on USD. If this risk scenario materialises, there is a definite risk that EURUSD will break through the top at 137.11 seen in February, which would send USD considerably lower.
A figure between 165,000 and 200,000 would only result in minor intraday fluctuations depending on the positioning prior to the release.
Read full report: FX Research
JYSKE Bank