| Currency <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> | Daily Percentage Change (%) | Intraday High | Intraday Low | Day's Range (pips) |
| NZDUSD | +1.2% | 0.6345 | 0.6253 | 92 |
| EURCAD | -1.5% | 1.4205 | 1.3967 | 238 |
USDCAD | -1.4% | 1.1229 | 1.1051 | 178 |
NZDUSD<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Cross Bidding Underpins Kiwi
With no economic data for release on the session, traders bid the Kiwi higher ahead of next weeks slew of economic data. Given the current assessment that inflationary pressures remain looming over the economy, the market will place special emphasis on the retail sales and food prices figures while additionally monitoring the manufacturing assessment. Should figures print high, the aforementioned notions look to garner further momentum boosting the underlying in the near term. Cross bidding also contributed to the days gains as the <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />New Zealand denomination appreciated against the Japanese yen, Euro and Aussie throughout the North American session. Subsequently, dollar selling was seen on a wider deficit in the worlds largest economy. Rising against the $62 billion seen last month, the report widened to $63.43 billion. However, the figure was slightly narrower compared to consensus estimates of a $65 billion shortfall as crude oil price abated slightly in the month. As a result, at the close of the weeks activity, offers continue to apply pressure to the Kiwi bulls at the 0.6350 figure. Buying interest is surrounding 0.6300 comparatively with lower bids below the figure.
EURCAD
Preferred Cross Short On USDCAD Major
Given the slightly better than expected US trade balance figure, incremental selling on the major continued and added downward pressure on the EURCAD. Major shorting in the USDCAD currency pair was reflective of the days top short prospect in the cross as the Canadian dollar was favored despite worse off crude contracts in the morning. The better than expected employment reports additionally overshadowed the drop in merchandise trade balance as the Canadian economys surplus narrowed slightly yet again. The trouble seems to be stemming from a higher appreciating domestic currency curbing demand for exports as foreign sources find it more difficult to purchase greater quantities of Canadian based exports. Nonetheless, the sessions employment report remained suggestive that there is plenty of demand even as the overall valuation has dipped as producers and manufacturers remain hiring.
Employment Survey Sparks Rate Bidding
Renewed Canadian dollar strength emerged on the session as employment figures were released better than expected. Canadian companies in the month of May added 97,000 jobs to the economy, dropping the employment figure down to 32 year lows of 6.1%. Sparking inflationary talk, wages grew by a whopping 4 percent, higher than the 3.1 percent witnessed last year. Why is this important? Essentially, the report lend to the lack of slack in the current labor market as companies continue to hire on rising demand and production. However, this is causing wages to rise boosting inflationary pressures in the worlds ninth largest economy.
Subsequently, should the trend continue, the report looks to weigh heavily on the minds of central bankers as it remains evident that inflationary increases have a ways to go. In line with recent rate hikes by industrialized nations, the current level of consumer prices may prompt further tightening measures by the central bank, in light of comments that suggested otherwise at the last monetary policy decision. The potential for this outcome boosted the spot in the North American session, overshadowing falling crude oil contracts. As a result, further offers continue to keep the pair lower in the close while bids look to re-emerge at the 1.1050 figure.
