• USD/CHF +0.5%
• USD/CAD +0.5%
• NZD/USD -0.9%

USD/CHF

Employment Anticipation Boosts Dollar: The greenback gained on the session in light of a record trade deficit for the month of January and a higher than expected initial jobless claims report.  For the month, imports continued to rise and outpace exports to the tune of $68.5 billion, up slightly above 5 percent.  Notably, deficits with other countries, especially Canada and Europe, rose.  However, garnering the most attention was a climb in the debt owed to China.  Rising to $17.8 billion, the trade deficit now comprises, almost 26 percent of the overall shortfall and looks to spark further jawboning by policy makers in the near future.  Adding to theoretical dollar downside was a higher than expected initial jobless claims.  Rising to above 300,000 for the first time in five weeks, the report claimed 303,000 and places significant speculation in favor of a potentially lower figure for tomorrowâ�,��"�s employment report.  Nonetheless, coupled with a higher than expected Swiss consumer price figure, the underlying currency pair rose as position paring dominated the session following yesterdayâ�,��"�s gains.  With traders on the way side now, volume and price action should remain thin till the London open, restricting the spot price.  Regardless of the outcome, tomorrowâ�,��"�s report should provide for some volatile moves along with pre-weekend squaring.

USD/CAD

Bulls Continue Advance Against Loonie: Canadian bulls were under the gun again on the session as traders bid the base greenback currency.  Continuing on a 4 session climb, the underlying advanced on lower energy prices and a less than expected merchandise trade balance for the month.  Setting a record C$7.7 billion in the previous release, the current balance fell lower to print C$6.3 billion, sparking bearish momentum on the session.  Attributed to the slide was a lowering in energy valuations as crude oil and subsequent product prices fell during the period.  This added to the earlier dovish comments following the Bank of Canada rate decision as market sentiment is leaning towards a temporary halt in the current tightening bias.  Looking ahead, traders will now focus on the unemployment figures for the Canadian economy with further suggestions of a tight labor market widely anticipated.  Should these suggestions materialize, the upbeat results could be enough to turn the tide if the U.S. employment report comparatively dips.

Rumorville: Offers are looking heavy at the current price with stops just below at the 1.1615/20 figures.  Comparable bidding action is positioned at 1.1585 with further buying interest below at 1.1560 and 1.1530.  Small stops reside below at 1.1525.

NZD/USD

No Hope For The Kiwi: Leaving cash rates at the current 7.25 percent, Reserve Bank of New Zealand Governor Alan Bollard remained steadfast in his belief that inflationary pressures will continue to rise above at a 3.25 percent in the near term.  However, the current decline was exacerbated as subsequent comments hinted at a potential rate cut consideration.  Conceding a slow down in business activity and corporate confidence, the governor also noted that consumer spending seemed to have waned slightly in the most recent period.  Nonetheless, Bollard reaffirmed the previous notion and stated that an easing decision of any sort would â�,��"require a more rapid reduction in domestic inflation pressures that the substantial slowing already assumed.â�,�  Still, the market has already accepted the higher probability of a rate cut, subsequently adding more pressure onto the underlying currency. Additionally, carry trade liquidation is also looking strong as expectations run high of a decent rise in employment in the worldâ�,��"�s largest economy.

Rumorville: Selling pressure continues to mount as offers are coming in at 6520/25.  Stops just below at 0.6440 and 0.6410/20 could provide moment for a further decline should the selling pressure be reinitated.

Richard Lee is a Currency Strategist at FXCM.