The US Dollar is modestly stronger as the Asian session gets underway, no doubt buoyed by expectations for a strong Non-Farm payroll report out of the US. The range of estimates vary from +23K to +225K with the median at +185K. This report will be closely watched as the market assumes that an improving labor market is a key factor for the FED to begin reducing their monthly asset purchases. A print over +200K coupled with a dip in the unemployment rate should be sufficient enough to ratchet up expectations for a September start to the tapering process.
Japan’s Monetary base rose to +38.0% which was lower than analysts forecasts of +43.2% but higher than prior month's reading of +36.0%. Australia's PPI posted a +0.1% which was lower than both estimates of +0.6% and last quarter's reading of +0.3%. The Aussie breached the 0.8900 level on this release to make a session low of 0.8887 before rebounding a bit. The market is pricing in a 95% chance that the RBA will lower rates by 25bp to 2.50% when they meet next week and this report should in no way deter them from doing so.