Forex Asia Review – Yen, Franc strong, risk currencies weak ahead of US payrolls

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EURUSD opened the session at 1.4260 and settled in the Asian session after a huge drop yesterday due to disappointing euro zone manufacturing data , which renewed concerns of sluggish euro zone growth and fuelled speculation of rate cuts by the ECB. The euro was supported from a further fall due Asian sovereign buyers briefly propping the single currency up to as high as 1.4279 before it fell again to flatten out. Due to uncertainty on the dollar, euro will remain supported as many market players are looking ahead to the important NFP and unemployment rate that shows forecasts of U.S. jobless rate remaining above 9 percent last month.

 

GBPUSD opened 1.6275 and slowly edged up on the back of Asian EUR/USD buying which saw cable up to 1.6196. From there cable eased off as Asian bourses fell and risk aversion came back as markets began selling off in nervous anticipation of Non Farm Payrolls data at 1230GMT.

 

The Swiss franc remained strong in Asia and dollar fell to as low as 0.7920 from the opening at 0.7950. While U.S. manufacturing data yesterday was better than expected and temporarily propped up the dollar, the numbers were not sufficiently strong to rule out further Fed policy measures. And also the all important NFP jobs report later today will be quite important to market direction. Investors are playing it safe for now and seeking protection in the safe haven franc.

 

The Australian declined in the Asian session after reaching a month high in the prior session due to better-than-expected retail spending data and a strong outlook for Australian investments that gave investors optimism for more economic growth and cooled rate cut expectations which the RBA has recently hinted on. AUDUSD touched a low of 1.0686 as risk sentiment faded ahead of the U.S. NFP and jobs report that economists forecast a drop in job creation in August.

 

USDJPY opened Asia at 76.92 and briefly rose to 76.96 before falling to 76.81.Exepctations are a little pessimistic ahead of the U.S. non farm payrolls report later today and investors are adjusting positions and protecting themselves for now with the safe haven yen.

 

Gold was little changed during a quiet Asian session for the metal which opened the session at $1,824.93 and flattened out into a very tight range as investors stood on the sidelines ahead of U.S. payrolls data due later in the day, that could give more signals of the possibility of further Fed quantitative easing.