Risk Appetite Increases Further After ADP Report, Ahead of CBs Decisions - 6.3.2013

Early on Wednesday major currencies were ranging ahead of the central bank’s monetary policy decisions that would be released later today and tomorrow. The largest mover was the Australian dollar against the US dollar, surging to 1.0300 resistance level in the aftermath of RBA decision to hold interest rate unchanged, while during European session the pair corrected lower. Recent risk-on lifts again the AUDUSD attempting to retest recent highs at 1.0300 in the immediate trading. Looking ahead investors are anticipating construction index and Trade Balance on Thursday morning. The single currency against its US counterpart remains in 1.3068/1.3011 consolidation zone. However, moving towards the bottom as the US dollar gained after the ADP Report revealed that US private sector added 198K jobs in February, beating estimates of 172K, but still lower than 215K jobs increase the previous month. The ADP report supported the greenback from easing further, investors risk appetite increased with equity future indices trading positive suggesting that the rally will continue even higher. Risk appetite is also helped by expectations that central banks will expand stimulus. The US Dollar Index found support at 81.88 before rebounding to 82.20. The USDJPY found support in early trading today, providing some profits to the bulls up to now, rising from 92.99 towards cap at 93.61. Yesterday’s US ISM Non-Manufacturing indicated expansion more than projected and greater than the previous month, increasing risk appetite which was further supported today by ADP monetary policy expectations, setting a pressure on the Japanese Yen.