Aussie Dollar Gains; Euro Feels Pressure

The Australian dollar was the notable gainer overnight Thursday after impressive jobs growth figures increased speculation about rate hikes from the Reserve Bank of Australia this year. AUD/USD broke through the early August high to A$0.9237, the highest since April's A$0.9389.

The euro came under pressure again as the FT in Germany reported that European Central Bank policymaker Jurgen Stark said German banks need more capital. EUR/USD support at 1.2690 is in danger, with 1.2650 fibonacci support behind that. EUR/JPY traded as low as JPY106.16, while USD/JPY drifted down to JPY83.60.

Sterling has also been on the back foot ahead of the Bank of England decision later Thursday -- the bank isn't expected to make any changes to its bond-buying plan or the benchmark rate. The NIESR said growth slowed in the three months through August.

In Asia, the Bank of Korea unexpectedly left interest rates on hold at 2.25%, citing concerns about global growth, echoing the RBA decision from earlier this week. Malaysian industrial output increased at the slowest pace in eight months. Emerging market currencies were split, with gains led by THB, PHP and KRW, while losers included HUF, PLN and RUB.

Asian stocks bounced back after the good jobs data from Australia. The MSCI Asia Pacific index rose 0.7%, the first gain in three days, with Sydney's S&P/ASX 200 leading gains in the region, up 1%. There were advances in Japan, Hong Kong, Korea, and India, while Taiwan and Shanghai saw declines.

European stocks were lower, while U.S. futures were trading to the downside. .

Bonds were steady. The 10-year JGB yield was at 1.115%. European bonds opened a little higher, with Germany's 10-year bund yield down 1 basis point to 2.28%. U.S. Treasuries were little changed, with two- and 10-year yields at 0.51% and 2.64%, respectively. The Federal Reserve sells $13 billion of 30-year debt Thursday, while Wednesday's sale of 10-year debt drew a yield of 2.67%, and a bid-to-cover ratio of 3.21, higher than the average 3.06 for the last 10 sales.

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