China trade surplus buoys AUD

The dollar is trading 50 points off session highs following the broad-based USD rally on Friday after another robust US jobs report. The headline non-farm payrolls rose by 295k in February and despite the 18k negative downward revision to the previous two months, the three month average still comes in at a very impressive 287k. The unemployment rate dropped from 5.7% to 5.5% as worked hours per week remained at 34.6. The only disappointment came in the form of the average hourly earnings which came in below consensus at 0.1% against the forecast of 0.2% and a solid 0.5% reading in January. The participation also dipped to by one tenth to 62.8%n although the adverse weather in the US could be seen as a contributor to this component. The market has again started to look at June at a possible month for lift-off in US rates if the ‘patient’ phrase is dropped from the FOMC statement on the 18th of March.

Chinese trade data has postponed the threat of the AUD breaking the February low of 0.7644 following a record trade surplus that saw exports rise sharply and imports decline moderately. The market is citing the Lunar New Year celebrations and a sharp drop in commodity prices as a possible explanation to the data.

The New Zealand Prime Minister John Key, who is an ex-forex trader, has suggested over the weekend that the RBNZ was looking to at new tools to stop house price inflation that involved not raising interest rates.

This week’s calendar of events suggests there is likely to be little to disrupt the trend. The Euro group and the Economic finance ministers meetings are likely to keep the focus on the euro early in the week, but beyond that policy-wise the coming week is relatively light with the exception of the RBNZ meeting, which will of course be important for the NZD. The US data will bring us retail sales and University of Michigan consumer sentiment on Friday.

EUR/USD
Supports 1.0825-1.0765-1.0590  | Resistance 1.0990-1.1155-1.1245

USD/JPY
Supports  119.50-118.65-118.20 | Resistance 121.30-121.85-124.15

GBP/USD
Supports 1.5000-1.4950-1.4815 | Resistance 1.5250-1.5345-1.5460