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Asian Session – Dollar range-bound in holiday trading; awaits employment report

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nyse1The US dollar was mostly inside its recent ranges during today’s Asian trading, ahead of key event risk such as the release of the nonfarm payrolls report and as a number of markets will be closed today because of the Good Friday holiday observed in many countries.

Although the economic data out of the United States the previous day was relatively upbeat, the dollar did not manage to stage any sustained recovery – particularly against the euro as euro / dollar appeared to be testing the 1.09 level.  Weekly jobless claims at 268 thousand were much less than expected and also lower than the previous week’s figure of 282 thousand.  The US international trade deficit for February was also down below 40 billion dollars a month at 35.4 billion dollars while factory orders for February were also better-than-expected.  The dollar was relatively stable against the Japanese yen at 119.60 – roughly the level at which dollar / yen began the year.

In other developments, the Australian  / New Zealand dollar exchange rate fell to a 30-year low near parity at 1.0092, as traders bet that the Reserve Bank of Australia will cut rates next week while the Reserve Bank of New Zealand will keep rates constant.

The focus today will be on the US March employment report, which is expected to show the creation of a net 245 thousand jobs.  The unemployment rate is expected to hold to 5.5%, while average earnings should pick up slightly to a 0.2% month-on-month pace.  It will be interesting to check whether the labor market will maintain its positive momentum given that other indicators have shown a deceleration in US growth.  Therefore, a lower-than-expected number will likely prove less of a surprise than a higher-than-expected one.

Otherwise trading is expected to be subdued due to the holidays in the major Western financial centers of London, New York and Frankfurt.

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