Once again interest rates are fueling a rally for the Aussie dollar as it happened in the second half of the last year, when the South Pacific currency ranked among the best performing options in

foreign-exchange markets.

Positive employment data published in Australia this Wednesday is helping the Aussie to rally to high levels versus most of the main traded currencies, as a declining unemployment rate, currently at 5.5 percent and much better than other key-economic regions in the world, is fueling speculations that interest rates will be once again hiked in the country next month.

AUD/USD traded at 0.9315 as of 00:11 GMT from a previous intraday rate of 0.9241.

If you want to comment on the Australian dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

The Japanese currency declined in the beginning of this Thursday’s session on Australia’s better than expected employment data, which increased attractiveness for riskier assets as the South Pacific economy recovery improves confidence among traders.

The yen, known as the best refuge currency for times of uncertainty, declined today as unemployment surprisingly fell in Australia, bringing Japanese investors to buy riskier assets overseas, as the Australian economic recovery indicates better economic conditions not only in the South Pacific region but also among its main trading partners.

AUD/JPY traded at 85.01 as of 02:35 GMT from a previous rate of 83.89 in the intraday chart.

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The U.S. currency was performing quite well during most of this week’s session as optimism regarding the U.S. economy was high, but the employment data published on Friday forced the greenback down versus most of the main traded currencies, as figures came much below forecasts.

The dollar posted the biggest weekly in two months as a non-farm payrolls report indicated more jobs cuts than expected, frustrating forecasts and declining odds that the Federal Reserve will lift stimulus and start a series of interest rate hikes that would happen sooner-than-expected, as some speculations suggested, if the economy accelerated at a faster pace. Among the most important traded currencies, U.K.’s pound was the only not able to beat the dollar, as the recession in the U.K. continues a reality, with quantitative measures used by the Bank of England being ineffective so far and the parliament failing to reach a consensus regarding the nation’s budget deficit.

Analysts were frustrated as this week’s U.S. data didn’t meet their expectations, and traders sold dollar positions after the non-farm payrolls report were published, considering that the greenback had been trading high during most of the week as optimism was intense. Next week will provide a monthly retail sales report, which will be the next key-report to determine the dollar’s trends.

EUR/USD closed the week at 1.4408 after being traded around the 1.4300 level before the payrolls report came to public this Friday.

If you want to comment on the U.S. dollar’s recent action or have any questions regarding this currency, please, feel free to reply below.

The Canadian dollar returned to gain today as its chief export, the crude oil, rallied as demand for energy increases, favoring currencies with a similar profile in

foreign-exchange markets as the Australian dollar, which is a main commodity supplier for China.

The loonie, as the Canadian dollar is often referred, had the fourth day of advances in this week as the crude oil returned to trade high in commodity markets closing future contracts near $ 83 a barrel, helping the Canadian dollar to rally specially versus its U.S. counterpart as frustrating employment data declined attractiveness for the greenback during most of today’s session in North America. Commodity’s strength are pushing a new rally for the loonie which may eventually climb towards parity with the U.S. dollar, as long as this market scenario remains the same.

The Canadian dollar has being one of the most attractive currencies in the beginning of 2010 as its correlation to commodities and equities markets has been fueled the loonie’s rally since last December. The loonie may touch parity with the U.S. dollar in the following weeks if the Bank of Canada doesn’t intervene on its rally with statements or actual measures.

USD/CAD closed today at 1.0293 from a previous intraday rate of 1.0348. CAD/JPY remained neutral after high volatility at 89.94.

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The aussie edged higher yesterday as continued strong demand for the high-yielding currency offset positive employment data in the UK.

• The UK currency found early support following better-than-expected employment data that revealed the rate of people claiming benefit allowance was declining.
• However, the news was unable to buoy a broadly weaker pound, with investors continuing to be attracted by the recent rate rise and general positive sentiment surrounding the Australian economy.
• The aussie also took advantage of rallying equity markets, which took their lead from better-than-expected quarterly earnings at JP Morgan reinforcing the notion that economic conditions are improving.
• In the early hours of this morning, the Reserve Bank of Australia chief made a hawkish speech that has provided a boost to high-yielding currencies. The broad dollar sell off that has ensued has prevented the pound from sliding further against the aussie, with the price currently hovering below 1.75.
• Sterling has also received a boost this morning in the wake of positive words from BoE policymaker Paul Fisher who said that he felt confident that QE was working

Sterling made strong gains in early trading yesterday following better-than-expected employment data, but the price pulled back to close up 0.4% at $1.5980.

• The number of UK jobless claiming unemployment benefit rose by 20.8K in September, less than the forecast figure of 25.1K, and the smallest rise since May 2008, enabling the pound to post an intra-week high of $1.6022.
• The greenback also suffered from comments made on Tuesday evening from Fed Vice Chairman Donald Kohn, which supported speculation that the dollar downtrend will be broad and continuous for some time to come.
• However, the dollar trimmed its losses in the afternoon following a drop in sales figures. Due largely to the end of the cash-for-clunkers programme, retail figures in the US fell by 1.5% in August, having risen by a revised 2.2% in August.
• The dollar has come under heavy pressure in trading this morning after the Federal Open Market Committee minutes, released late last night, confirmed speculation that US interest rates would be kept at near zero for an extended period.
• Sterling has gained over a cent, or 0.8%, so far today, with the price currently hovering just above 1.61.

The single currency climbed to a two week high of 1.4815 yesterday as investors continued to sell the dollar to fund riskier trades.

• The single currency returned to its recent upward trend, initially climbing half a percent, as investors took up dollar selling in the wake of further evidence of global economic recovery.
• Australian employment data revealed a rise in jobs in September, reinforcing risk appetite and triggering broad dollar selling as its haven appeal weakened.
• The single currency held its gains in the afternoon after the European Central Bank left interest rates unchanged at a record low 1.0%, as the market expected.
• In his following statement, the ECB President, Jean-Claude Trichet told reporters that “the euro-area economy is stabilizing and is expected to recover at a gradual pace.”
• Additionally, Trichet was not as forceful about the need for a strong dollar as many had expected him to be, allowing the single currency to close up at 1.4793.
• The single currency has trimmed its position in trading this morning, after Ben Bernanke indicated that US monetary policy may have to be tightened as a recovery takes hold.

The pound climbed just over a cent (0.6%) against the dollar, buoyed by the BoE’s decision to keep its assets purchase scheme on hold.

• In early trading sterling moved up against a broadly weak dollar, supported by expectations that the BoE would keep interest rates unchanged and maintain its current level of quantitative easing.
• The dollar also came under pressure, falling broadly as rising equity markets fuelled demand for riskier assets at the expense of the safe haven US currency.
• Dollar selling was led by positive employment data in Australia, which spurred investors to relinquish positions in the greenback in favour of higher-yield currencies, favouring an upward movement in the sterling/dollar pair.
• At midday, the BoE announced no change to their current monetary policy, which allowed the pound to advance further, reaching a ten day high of 1.6117.
• However, sterling did cap its gains as Mervyn King left the door open for further quantitative easing in the future.

Sterling reversed a three-day decline against the kiwi, posting marginal gains following a rise in risk aversion, closing the day at 2.1682.

• It was a choppy session for sterling, which initially dropped to a low of 2.1476 in early trading, as a lack of major economic data gave support to the higher-yielding currency.
• However, having dipped, the pound rebounded strongly, regaining over two cents as global equities backed off to trade in the red.
• Weak European stocks were followed in by the US markets, easing risk appetite and allowing the UK currency to stabilize in the afternoon, consolidating its position above 2.1650.
• In the early hours of this morning, the pound relinquished its gains as the kiwi found support from strong employment data from its neighbour Australia, and as higher Asian equities reaffirmed demand for the New Zealand dollar.
• However, the pound has found broad support as the European markets open, with the price currently hovering just below 2.17.

The pound rebounded nearly two cents from its intra-day low against the aussie, halting its sharp slide and posting marginal gains of 0.2%, to close the day up at 1.7912.

• The Australian dollar has rallied strongly over the past two days following the surprise rate hike, but the aussie pulled backed yesterday as risk sentiment in the market dissipated.
• The high-yielding currency backtracked as equities took a downward turn and as investors sought defensive positions ahead of important statements in the UK and EU today.
• Additionally, analysts noted that market players may have over-bought the aussie, realising that it was only one central bank to raise rates and that similar moves from other nations may still be some way off.
• In trading today however, the Australian dollar’s upward trend has continued, already up 0.8% on the day, as strong employment data reinforced the pace of recovery in the nation.
• Overall unemployment fell to 5.7% in September, an improvement from 5.8% the previous month and beating out market expectations of 6.0%.

The euro relinquished some of its recent gains against the greenback yesterday, with investors on the defensive ahead of the ECB rate decision today.

• A broadly stronger dollar was the currency of choice yesterday as investors trimmed “riskier” positions in favour of the haven currency as equities slipped into the red, easing risk appetite.
• The dollar also benefited after a US official said raising interest rates would not derail the US economic recovery. “Even if we were to start immediately, much time would pass before incremental increases could be considered tight or even neutral policy.
• Additionally analysts noted that the greenback was being supported by speculation that the dollar’s decline may have been too fast to sustain.
• In trading this morning, the greenback has come under pressure after Australian employment data reinforced demand for higher-yielding assets.
• The ECB are widely expected to announce today at 12:45BST that interest rates in the eurozone will remain at a record low of 1.0%, though the tone of the accompanying statement is likely to reflect growing optimism over the state of economic recovery in the region.

The pound reversed its steady decline against the greenback yesterday as investors relinquished defensive positions ahead of today’s MPC announcement.

• Cautious investors initially sought safety ahead of the two key central bank meetings today, putting pressure on the UK currency.
• Additionally, in an interview, Kansas City Federal Reserve President Thomas Hoenig said that the US central bank should start raising interest rates “sooner rather than later,” which buoyed confidence in the US economy.
• However, the greenback’s gains were limited, with the pound rebounding a cent from its intra-day low as investors felt that the market had gone too short on sterling positions ahead of today’s statements.
• In trading this morning, the dollar has been broadly sold as employment data in Australia beat expectations for a fall in jobs in September, with the rate actually falling to 5.7%.
• The pound has advanced nearly a cent, consolidating its positions above 1.60, although trading may be volatile following the MPC rate decision, announced at 12:00BST today.

Sterling relinquished gains against the kiwi dollar on Friday, as concerns mounted over the strength of the global recovery, with the price closing the week at 2.2269.

• Following the release of worse-than-expected jobs data in the US, risk adverse investors bought into dollar and yen havens on Friday, weakening the higher-yielding, ‘risky’ assets.
• However, the kiwi rebounded strongly in afternoon trading, as investors turned bearish in their sentiment towards the US recovery.
• The weak employment data added to concerns that the US recovery is struggling to take hold, and, after an initially flurry of dollar buying, many investors opted against the relative ‘safety’ of US assets.
• In trading this morning, the price has dropped back below 2.22 as the New Zealand currency tracked the strength of its aussie counterpart.
• Heightened speculation of an imminent rate rise in Australia has supported higher-yielding currencies this morning, and the kiwi could find further support as investors await expectations of improved New Zealand business confidence in a survey released today at 22:00BST.

The pound slid against the dollar on Friday, completing its third straight weekly decline, as demand for the haven currency found support from weak US employment data.

• In early trading, risk appetite was down, with investors taking up defensive positions ahead of an expected rise in US unemployment figures.
• However with weak data already priced into the market, the pound avoided a further sell off after data confirmed an increase in jobless figures that brought overall unemployment in the US to 9.8%.
• The data did trigger a sharp fall in major stock indices, with traders concerned that the global recovery is struggling to find momentum.
• However, the pound was able to pick itself up from a four-day low of 1.5807 against the dollar, clawing back some of its losses, as European equities rallied slightly, to close the week at $1.5944.
• The price is holding steady this morning, having made initial gains after the G7 meeting over the weekend brought no talk of re-evaluating the strength of the US dollar.

The pound rebounded strongly yesterday, gaining over two cents, or 1.3%, as a sharp rise in risk aversion in the market, dulled demand for the ‘riskier’ currency.

• Both unemployment claims in the US and manufacturing data posted worse-than-expected figures, raising slight concerns over the rate of recovery in the world’s largest economy, and weakening demand for the higher yielding aussie.
• The negative US data was reflected in global stocks, which also took a steep downturn, with major indices loosing around two percent, which further reduced dollar selling, enabling the GBP/AUD price to rise.
• Analysts also noted that the aussie fell prey to light profit taking with investors concerned over speculation that countries are unhappy with the current weakness in the dollar.
• In trading this morning, the pound has edged down around 0.2% as investors avoid taking any long positions ahead of important US employment data later this afternoon.

A broadly stronger pound eventually relinquished its gains against the dollar yesterday, to close the day down 0.15% at $1.5955.

• The British currency initially edged higher after the IMF said that UK gross domestic product will expand 0.9 percent next year, from a July prediction of 0.2 percent, as the housing market slump eases and exports increase.
• However, the pound fell back in the afternoon, weighed down on speculation that money authorities would express some form of support for the US currency at the G7 meeting.
• Additionally data showed that the UK manufacturing PMI unexpectedly fell in September for the second consecutive month, which hampered sterling’s progress.
• In the US, both unemployment claims and manufacturing data posted below forecasts, which eased risk appetite and pulled the pound back below the 1.60 resistance level.
• The dollar is trading higher today as investors take up defensive positions as they await US non-farm employment data released at 13:30BST, which will give the market short-term direction.

The pound reverted back to its downward trend against the kiwi in trading yesterday, losing 0.8% to close the day near last week’s lows at 2.2163.

• A strong jump in a New Zealand business confidence survey added to evidence that the economic recovery is gaining pace, supporting demand for the kiwi.
• The Reserve Bank of New Zealand published a bright economic outlook yesterday, which was also picked up on by investors with expectations for a rate rise strengthening.
• Additionally, in the US, the second quarter GDP figure was revised upward revealing that the economy had contracted by less than initially expected, which supported a move into riskier assets, although weak employment data did offset this trend slightly.
• In trading this morning, the pound has lost further ground, with the price edging down below 2.21 as confidence in the kiwi remains strong.
• However, analysts have stated that the New Zealand dollar may cap its advances with investors unwilling to chase the currency ahead of US payrolls and manufacturing data later this week.

A mixed bag of data in the US prevented the pound from sustaining early gains yesterday, eventually closing just 0.1% up on the day at $1.5980.

• The pound shot up against the dollar in early trading, posting an intra-day high of 1.6123, after an industry report showed consumer confidence in the U.K. jumped by the most in 14 years.
• But the greenback trimmed its losses after the ADP Non-farms employment data revealed a worse-than-expected change in US employment which eased risk appetite and returned investors to the haven currency.
• The sharp dip, was initially offset as more data revealed an upward revision in the US GDP figure to just a 0.7% contraction from a previous -1.0%, and beating forecasts of a downward revision.
• However, later in the afternoon a weak reading of US manufacturing activity triggered mild safe-haven flows into the greenback, confirming investors’ fears that a sustained economic recovery is struggling to take hold.
• The dollar is trading marginally higher again this morning with traders awaiting important data on US employment, released today at 13:30BST.