8th February 2021 - AUD/USD rises sharply on Friday, erases weekly losses

Good Morning,

Market Headlines

US Non-Farm payrolls disappointed, rising just 49k in January (vs. est. 105k). There were some positive elements, the unemployment rate falling from 6.7% to 6.3%, helped by a fall in the participation rate from 61.5% to 61.4%. Also, weekly hours worked rose from 34.7 to 35.0 – a 21-year high. Seasonal factors may have played a part in the mixed nature of this report. ECB’s Chief Christine Lagarde spoke through a French newspaper on Sunday and said she expects the EU to pick-up in the summer, stressing that public authorities will have a difficult job weaning the economy off of emergency support.

Optimism prevails amid hopes for a new US stimulus package, as Democrats are working on passing US President Joe Biden’s bill of $1.9 trillion without Republican support. Wall Street flirted with all-time highs on Friday, while US Treasury yields surged to their highest since March 2020.

In the coronavirus front, the global number of new contagions and deaths continues to recede. Vaccine-immunization continues at an even pace, amid production and delivery delays. Meanwhile, Israel announced it may have found a cure for coronavirus after applying a medication called EXO-CD24. Out of 30 serious patients treated, 29 were released from hospital within five days.

Overnight Currency Ranges

AUD/USD: 0.7600 – 0.7678

EUR/USD: 1.1960 – 1.2050

GBP/USD: 1.3674 – 1.3740

USD/JPY: 105.33 – 105.76

USD/CAD: 1.2755 – 1.2830

NZD/USD: 0.7139 – 0.7206

AUD/JPY: 80.14 – 80.92

AUD/NZD: 1.0620 – 1.0658

AUD Thoughts

A quieter start to the week is expected with little data of note today and the back end of this week should be quiet with a lot of Asia out celebrating Chinese New Year.

AUD/USD performed well into the weekend and closed at its highest point for the week at 0.7678. Demand is expected back toward 0.7580 while offering interest likely begins ahead of 0.7700 with the bigger technical resistance still sitting at the recent highs of 0.7820.

Event Risk Data Today

Euro Zone - German industrial production is estimated to have risen by 0.3% in December, for a -1.0% annual pace. Sentix investor confidence survey is expected to rise from 1.3 to 2.0.

US - Fed speak from Mester