The American Non-Farm Payroll report was published on Friday up to 257k and the Average Hourly Earnings rose to 0.5%, leading to an immediate strength of the US Dollar. It seems that the engines of the U.S. economy are running at its full capacity and only the expensive dollar poses problems for the exporting companies. Fed is thinking to raise the interest rates by midyear, as soon as it gets the list of desired signals completed. With the positively surprising NFP figures Euro depreciated against USD to 1.3000 on Friday while this morning it looks like the pair is trying to recover its losses from Friday. Further corrections may remind to the market participants about the fact that Athens still rejects an international bailout program while both the U.S. and Germany are struggling to reach a truce between Ukraine and Russia.
Australian dollar’s evolution, closely followed by the New Zeeland dollar, continues the trend of depreciation as on Friday the central bank lowered both its medium term forecast for inflation and economic growth, warning of the rise in the unemployment rate while giving free rein to currency depreciation. A further reduction in the Australian interest rate down to 2% is expected by mid-2015. AUDUSD pair is currently trading at 0.7765 while a breakout of 0.7750 could trigger a further depreciation towards the local lows at 0.7624.
The price of both WTI and Brent oil has been gaining momentum since last week and is now hovering close to the local peaks. The petroleum quotations are struggling between the rising demand in the United States, however falling in Europe and slowing production in America while the output in the Arab States is being steady. As prices are thought to have touched a low limit, the only direction left is up, but this tendency has to fight with the still in place large supply. Meanwhile, there has been statements from some Saudi officials that Saudi Arabia is having behind the scene discussions with Russia to stop supporting Syria. Accordingly Saudi official claimed that only after Russia stops supporting the Assad regime, they would be willing to support Russia to rise the oil prices.
The Canadian dollar was backed by good data reported on Friday: the Building Permits rose to 7.7%, Employment Change increased to 35.4K and the Unemployment Rate decreased to 6.6%. USDCAD is struggling to stay below the 1.2600 resistance level, but is needs a breakdown of the 1.2375 support in order to go lower. A breakout of the 1.2600 can sustain a new rally for the USDCAD quotation.
Gold has been trading down to 1230 dollars per ounce on Friday after the NFP report. Even if now we should watch out for corrections, in the long term the downward trend premises are still valid.
