Sean Callow, Research Analyst at Westpac, notes that the US dollar softened in NY trade, helping AUD/USD extend its GDP-driven gains to touch 0.7300 for the first time since 4 January. Key Quotes “The ADP survey was on the strong side but overall news flow was light. The survey of private employment from payrolls firm ADP rose 214k in Feb (vs 190k expected), although Jan was revised 12k lower to 193k. San Francisco Fed president Williams said the economic outlook hasn’t changed much since the Fed’s December forecasts and that the Fed remains on the path to raising rates. EUR/USD dipped as far as 1.0826 but the US dollar lost momentum in the NY afternoon so the euro retraced. Similarly, USD/JPY reached 114.56 then fell steadily in NY to be lower on the day. Outperformer AUD extended yesterday’s post-GDP reaction from 0.7200 to 0.7301. NZD/USD bounced off 0.6600, reaching 0.6678. AUD/NZD extended GDP-driven gains 1.0975, almost identical to the end-Jan high. The last trade above 1.10 was early December. The US 10yr treasury yield extended recent gains from 1.82% to 1.87%, a one month high, but then faded to 1.84%, probably weighing on USD/JPY. Markets now have the next Fed fully priced for Dec 2016. Wednesday’s USD/CNY fixing of 6.5490 was in line with our expectation of “the high 6.54s” but was above most expectations so spot USD/CNY was well supported over the day, with an official close of 6.5515. The NY session fall in USD/majors argues for a lower USD/CNY fixing, say around 6.5450. The highlight of the US calendar is ISM non-manufacturing. Feb is expected at 53.1 from 53.5, continuing its drop from the Jul 2015 peak. Jan surprised sharply to the downside and had a big impact on markets. Both the headline and employment subindex will be closely watched and could see economists revising their forecasts of the payrolls release tomorrow.” For more information, read our latest forex news.