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Kiwi Finds Temporary Relief

Kiwi opened up well bid from the overnight as AUDNZD cross pair selling bolstered the majors move against the dollar.  Exacerbating the decline were less than expected non-farm payrolls as employment only rose 121,000 in the <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />US.  The figure, although not considered weak, dipped against the 175,000 consensus expected figure and lends some doubt as to the resilience of the Federal Reserve in continuing the recent tightening.  In addition to economic data, the Kiwi gained some strength on cross pair selling as the AUDNZD was subject to shorters, triggering stops on the way down to the 1.2280 figure ahead of the US open.  However, what spurred the move quickly provided a bounce back as NZDJPY cross selling on technical support capped major pair gains in the afternoon ahead of the weekend.  Looking ahead, the quarterly survey of business opinion is likely to weigh in on early week action as the retail trade report and PMI surveys are expected to garner focus towards the weeks end.  Although positive results may be likely, further selling is likely with plenty of players waiting to re-initiate shorts on pullbacks.

USDJPY

Yen Moves On China Speculation

It was a two pronged sword that dealt the USDJPY currency pair a blow on the day as US employment data was released weaker.  Dipping below the consensus figure, the non-farm payrolls report coincided with mass speculation of an emergency meeting by the Peoples Bank of China.  In the meeting rumors circulated of a possible widened trading band or even an eventual rate hike in the near term.  In addition, bolstering yen demand were reports that government officials are now conceding to a rate hike adjustment by the Bank of Japan.  This decision, simply, means that the market could be delivered the much anticipated rate hike decision ahead of some September forecasts.  As a result, the news sparked yen bullishness with cross EURJPY selling spilling over into the major pair.  Heading into the weekend, selling pressure continues to remain heavy on the pair at 114.20 and slightly lower with sellers still residing at the 114, capping any gains.  Comparatively, on the other side, bids are coming in heavier by rumored Japanese investment buyers at the 113.50 with continued interest all the way down to 113.20.  Looking to next week, attention is set for the Bank of Japan monthly meeting as the market nervously awaits the decision.

CADJPY

Bank Of Canada Expected To Halt

Canadian strength all but vanished on the day, leading to a stronger yen leg in the cross pair.  Bolstered by major selling in the USDJPY, the CADJPY cross was subject to pressure by a lower then expected Canadian employment report and a take back in crude oil contracts.  Settling at $74 a barrel, contracts have pulled back from the record highs just hit sessions ago.  On the other side, according to Statistics Canada, employment actually fell by 4,600 jobs as full time employment declined on the month.  Falling far below the increase expected by the consensus, the figure sparked concern over the sustained growth of the worlds ninth largest economy.  The notion relates to next weeks decision by the Bank of Canada.  Already pricing in a no rate change, markets are not looking for the central bank to move on this decision. However, this does not preclude an elected move in the second half o the year.  Until that time, the indecision may further the current range bound atmosphere plaguing the pair.  Nonetheless, the days move places the pair as the largest mover on both the percentage and points tips.