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01/06-12   -   Press releases

China slowdown fears add to market worries

Typical of a Non Farm Payrolls day, traders have been holding back from any major positions ahead of the big jobs announcements. Although there has been relatively little movement so far today, there is a negative bias after Chinese manufacturing PMI data came in below estimates.

With it´s close links to China, the Australian dollar is leading the fallers this morning, with the AUD/USD down 0.30% and the AUD/JPY down 0.20%. The dollar/yen balance has tipped in favour of the dollar this morning with the USD/JPY rising 0.11%.

The pound continues to show relative weakness with the GBP/USD and EUR/GBP down around 0.2%.

Coming up today, we have UK manufacturing PMI due at 09.30 with a drop to 49.7 expected, implying a contraction of growth. At 10.00 we have European unemployment rate data. From 13.30 we have the big US announcement with Non farm employment change expected to come in at 151k, with the unemployment rate unchanged at 8.1%. US ISM manufacturing PMI follows at 15.00. Canadian GDP numbers are released at 13.30 with a rise of 0.4% expected.

It is never easy making predictions ahead of the lottery that is Non Farm payrolls, but there are some elements that continue to stand out. Public interest in the US dollar has now reached levels not seen since the height of the credit crunch in 2008. Both here and in a similar period in 2010, a major reversal was not far away. The situation is complicated by the uncertainty in Europe, but on a technical perspective at least, there is room for a reversal in the normally closely correlated USD/CAD.

With US payrolls and Canadian GDP also due today, we have the potential for big movements today. In fixed odds trading sometimes it better to take the risk of your position being very right or wrong, rather than just missing out on a trade closing at your target levels.

A good way to play this might be a LOWER trade on predicting that the USD/CAD closes Monday (3 days time) below 1.0325 for a potential return of 126%.

Get this trade now, go to:

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