– USD: Softer today, but stronger towards weekend
Commodity currencies are likely to trade well today. NZD to gain on the positive NZ Fonterra’s latest fortnightly auction which saw global dairy prices leapt by 10.4% to the highest level since June 2011. AUD to be supported by the slightly better than expected domestic Q4 GDP print at 3.1% YoY (exp: 3.0%) and 0.6% QoQ (in line with expectations) while CAD is likely to rebound on our expectations for a less dovish Bank of Canada statement later today. Also supportive for AUD and CAD includes headline that AUD and CAD are to be included in the reserve currency list in H1 2013. The USD will probably remain soft on the day, trading as a function how dovish central banks are: more dovish stance could see the USD strengthen, while less dovish central banks could see the USD trade softer. Tomorrow, a dovish “double whammy” from the ECB and BoE (more below) could see the USD recover towards the end of the week. Reasonably decent ADP and NFP data could further help USD. Our economists expect stronger readings for both ADP today (175K vs. 160K consensus) and NFP on Friday (160K vs. 150K consensus).
Click here to read the full report: FX Daily
BNP Paribas