Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist
Aussie at highs ahead of jobs
The US dollar continued its recent run of losses with the greenback nearing the lowest level since 27 January.
The greenback eased ahead of tonight’s key US non-farm employment report.
The market is looking for 170k new jobs to be added in the January report after last month’s 256k result. The unemployment rate is forecast to remain steady at 4.1%.
The Aussie remained near recent highs with the AUD/USD up 1.1% so far this week despite the early, tariff-driven sell-off.
The kiwi remained near recent highs while the USD/SGD was steady near ten-day lows.
US sentiment in focus
Later, the University of Michigan will release its consumer sentiment survey.
In February, the preliminary University of Michigan consumer sentiment report probably decreased slightly to 70.8.
During the survey reference period, fuel prices were sideways but equity prices plunged precipitously.
Recently, consumers’ plans to purchase major home durables have improved as a result of their predictions of future price increases.
The USD index attempted but failed to break below the 107.6 level (50-day EMA), which remains key support.
The next support lies at 106.97 (January low), while resistance stands at 110.18 (January high).
INR at lows ahead of RBI
Today, India will make its rate announcement.
We anticipate a unanimous decision by the RBI’s MPC to implement a monetary policy shift by lowering the policy repo rate by 25 basis points while keeping the policy stance at “neutral.”
Sanjay Malhotra, the new governor, will preside over this MPC meeting for the first time and give his first market talk on his opinions on monetary policy and the economy.
Following a small upswing around Diwali, growth in India has started falling down once more. The recent downward trend in inflation has little reason to reverse.
We are positive on USD/INR, currently at all-time highs since 1973.
The key support level is at 50-day EMA 84.2847, and next resistance 89 handle in sight.
Aussie trades at highs ahead of US jobs risk
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 3 – 9 February
All times AEDT
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*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.
