• GBP/USD -0.6%
• USD/JPY +0.7%
• EUR/JPY +0.6%

GBP/USD

U.S. Data Counters Unlikely Dip In UK Rates: Countering sentiment of stable rates in the U.K., traders bid the dollar higher as employment growth shattered consensus figures.  Rising to the tune of 243,000 for the month, the labor statistic rose above the 210,000 predicted by economists proving continued strength in the labor market.  Additionally, the figure assuaged fears that Februaryââ,¬â"¢s Norheastern snow storm may have adversely affected the overall report.  Now with healthy employment and wage growth confirmed, market speculation is definitive in its stance that rates will increase to 4.75 percent.  However, the question of continued tightening momentum remains as policy makers will more than likely opt to pass in the first week of April as the meeting runs very closely to the March meeting.  This looks to place an enormous amount of pressure on the sterling counter as rates are not likely to move higher, but rather stay consistent around the current 4.5 percent.  Yesterdayââ,¬â"¢s growth estimate released by the National Institute for Economic and Social Research pinned the UK economy to grow at a 0.7 percent rate in the three months ending February.  The rate is consistent with previous estimating through January of 0.8 percent.  Ultimately, with growth consistent, the report is suggestive that further rate hikes are unnecessary but also precludes any notions of a cut potential.  Nonetheless, market participants sided with a stronger dollar on the session heading into the weekend.

USD/JPY

Consumers Turn Reluctant In Japan: Aside from optimistic employment data on the U.S. side, across the Pacific data was less than spectacular as household spending seemed to wane in the month of January.  Expected to dip 2.7 percent on an annualized comparison, consumers remained reluctant forcing the figure lower by 3.5 percent.  The new print eclipses the 0.8 percent climb seen in December.  Additionally, machine orders, indicative of the export market in Japan, declined 6.2 percent against last monthââ,¬â"¢s rise of 6.8 percent.  The slight dip pushes the overall annualized figure to 9.8 percent, down 1.5 points, and suggests that global demand may be waning or slightly plateauing at best.  Nonetheless, yen traders will have their opportunity as gross domestic product figures are expected to continue their healthy pace.  For the final reading of the fourth quarter, annualized GDP is expected to slow slightly to 5 percent from the explosive 5.5 seen in the previous estimate.  Impressive, the growth suggestion looks to be countered by continued signs of deflation as the deflator is expected to decline 1.6 percent.

EUR/JPY

OECD Sees Future Growth In Euro: European figures were relatively in line, with some minor exceptions to the downside.  With pressure already being exerted on the yen side from the USDJPY currency pair, Euro bulls were spurred on by a higher than expected leading indicators report.  According to the OECD, Euro Zone expansionary suggestions are building for consecutive months as the member states continue to improve.  With manufacturing and industrial production from the areaââ,¬â"¢s top two economies still positive and a recent rebound in consumer sentiment and spending, there exists plenty of evidence.  As a result, the expansionary suggestions look to prompt central bankers in continuing their preemptive defense on inflationary pressures as prices continue to rise.  Traders are already siding with the possibility of another 25 basis point rate hike in the near term.  Looking ahead, GDP figures continue to remain a consideration, especially in the this cross with longer term focus on the weekââ,¬â"¢s industrial production figures.

Richard Lee is a Currency Strategist at FXCM.