• NZD/USD +0.4%
• EUR/JPY -0.5%
• AUD/CAD +0.5%

NZD/USD

Kiwi Makes News, Bears Pause: The New Zealand dollar gained some traction following the immense selling pressure of late as expectations run high for a narrowed current account balance in the fourth quarter.   Already ballooned to over NZ$5 billion, expectations are for a little more than 20 percent decline to a little over NZ$3 billion as exports looked to have ticked higher on a depreciated currency.  A lower valued currency effectively makes exports cheaper to foreign trade partners.  As a result, with exports looking to immensely benefit, there is mounting speculation that improvement may be in the near term for the commodity bloc economy.  Subsequently, this may imply nascent expansion in an otherwise flat line economy.  Growth seems to have tapered off slightly as consumers have pull back from previously high levels of consumption.  Additionally bolstering the move higher looks to be one of a technical nature.  With considerable downside momentum pushing the underlying lower, the spot price looks to be forming a temporary bottom.  Confirming the notion looks to be speculated buying interest further below at 0.6180 and 0.6150 figures. Selling interest may cap any near term crunches at 0.6300 handle.

EUR/JPY

Euro Dives On Lower Orders: Euro selling bids took the cross lower towards the 141.00 handle as new industrial orders dropped 5.9 percent in the month of January.  The figure is comparably pessimistic versus expectations for the figure to rise at a 0.8 percent monthly pace and places some questionability of the current "turnaround" formulating in the zone economy.  The concern, however, was not large enough to drive the EURJPY cross through the technical support keeping the price action consolidating. Comparably, the Japanese yen garnered some strength in the cross as Bank of Japan Governor Fukui noted that government efforts would be focused on reining in the ballooning state debt.  Subsequently, this plan calls for the purchase of public notes and may require some conversion by foreign parties.  Considered as yen strength, the conversion looks to also coincide with upcoming fiscal repatriation, both likely to spur the asian denomination higher.  As a result, the current support floor proves pivotal as it may spark further downside in the cross.

AUD/CAD

Squeeze Pushes AUD Higher Against Cross: Australia's leading index report dipped 0.1 point in January, signaling staid economic conditions in the next three to nine months as employment prospects thin slightly.  However, the long term trend rate of 3.7 percent was achieved, slightly lower than the 4.1 percent in December, steady as ever.  What looked to spur bulls on the session was the coincident index, measuring current activity, rose on the month as export reports looked optimistic for the second half of the year. Couple these with the technical picture and there was plenty to lift the pair.  Even with recent strength in the Canadian dollar fundamentals, carry still remains a highlight of this cross and looks to spur further interest in the cross as the Aussie looks bid as options and a short squeeze played heavily into today's climb.

Richard Lee is a Currency Strategist at FXCM.