Morning Traders;today will see the Aud , its move'n others currency Majors.Tonight's Reserve Bank of Australia monetary policy announcement is one of this week's most important event risks. The market is completely divided on whether the central bank should cut interest rates, which pretty much guarantees a big reaction in AUD/USD. Interest rate swaps show investors pricing in only a 65% chance of a rate cut this evening. The case for easing is strong, but economists are not sure whether the RBA will lower rates outright or prepare the market for a cut in March. Falling iron ore prices, slow growth in China, lower inflationary pressures and recent moves by other central banks could push the RBA to move this month but if they wanted to, they could afford to wait. According to recent economic reports, there have been improvements in Australia's economy. The PMI manufacturing index rose from 46.9 to 49 in the month of January, building approvals jumped 7.5%, there were two back-to-back months of solid job growth and most importantly consumer prices did not ease as much as economists feared. The RBA is very weary of creating a bubble in housing market and they may want to wait another month before cutting rates. The lower exchange rate and decline in oil prices is buying them time to prepare the market for easing if they choose to do so. We also feel that there is a 60/40 chance the RBA will ease this evening and this lack of confidence in any one view is why we believe that the rate decision should be traded reactively. We have seen the big extensions in USD/CAD and NZD/USD after their monetary policy announcements and if the RBA cuts, the decline in AUD/USD will last for days and not hours, giving investors plenty of opportunity to join the trend. Alternatively if the RBA stands pat, how AUD trades will be determined by their forward guidance. If they provide no details on future policy action, expect AUD/USD to make a run for 80 cents. If they leave rates unchanged but signal a cut in March, traders should sell into any knee jerk rally. While the RBA rate decision is in center focus over the next 24 hours, we have also seen big moves in the Canadian and New Zealand dollars. USD/CAD experienced its largest one day decline in more than 2 months on the back of softer than expected U.S. data and rebound in oil prices. If oil prices close above $50 a barrel, a potential bottom in oil could trigger a further recovery in the loonie. However pullbacks in USD/CAD should be bought as we expect a series of softer Canadian economic reports this week. New Zealand employment numbers are also scheduled for release on Tuesday afternoon / Wednesday morning local time. According to the PMI reports, there was stronger job growth in the manufacturing sector and weaker growth in services. The RBNZ's decision to drop their tightening bias raises the risk of a downside surprise for NZD/USD. Dollar Pulls Back On Friday, we talked about how this could be a tough week for the U.S. dollar. Following a weaker GDP report and uninspiring FOMC statement, we felt that there could be more profit taking on long dollar positions based on the premise that this week's economic reports would be softer. While this morning's mixed personal income and spending reports did not have much impact on the greenback the dollar lost its footing after the ISM data. Manufacturing activity slowed in the month of January with the ISM index falling to 53.5 from 55.1. The pain was compounded by construction spending which rose 0.4% versus a 0.7% forecast. No U.S. economic reports are scheduled for release tomorrow but later in the week, non-manufacturing ISM, ADP, and the trade balance are due. Of course, all of these reports pale in importance to non-farm payrolls. We are looking for job growth around 250k but the unemployment rate may not see much additional improvement given the steep decline in recent months. When it comes to this month's report, average hourly earnings are key. If wage growth picks up, the dollar could regain momentum, otherwise there could be more profit taking or range trading for the greenback. As we have seen in today's price action, even though U.S. data surprised to the downside, the pullback in USD/JPY and rise in EUR/USD has been limited. Unless non-farm payrolls surprises to the downside in a big way, the Fed is still on track to raise interest rates in 2015. Aside from these economic reports, U.S. dollar traders should keep their eyes on Treasuries and the speeches from Federal Reserve officials, who could shed more light on the central bank's policy stance. Euro ReboundsThe euro traded higher against the U.S. dollar today on the back of softer U.S. data, upward revisions to Italian and Spanish PMIs and a glimmer of hope for Greek fiscal finances. According to our colleague Boris Schlossberg, "Greek PM Tsipras stated that Greece would repay the IMF loans but noted that the abolishment of Troika is necessary as he continued to negotiate for a change of terms on the debt deal. For their part ECB members stated that the central bank would not become involved in negotiations with Greece for now and would focus on the bond buying program which will start in March.Although the situation with Greece could still spin out of control with the country essentially defaulting on its sovereign debt, for now the negotiations continue and the currency market is breathing a sigh of relief providing support for the euro." Meanwhile the euro is also being supported by EUR/CHF buying. There has been talk that the Swiss National Bank established an unofficial floor between 1.05 and 1.11. We previously noted that the recent price action in EUR/CHF is indicative of stealth intervention by the central bank and these talks only serve to validate our view. We are certain that the SNB has an internal floor for EUR/CHF and 1.05 is likely to be that level. However having just switched from currency to interest rate driven monetary policy, we doubt that the SNB is in a rush to make their tactics vocal. Sterling Traders Want 1.50 BreakBased on today's price action, it appears that traders really want to take sterling below 1.50. Despite better than expected manufacturing PMI data, the British pound traded lower against the U.S. dollar. The PMI reports are extremely important barometers for the U.K. economy and this release reinforces the country's outperformance versus the Eurozone. Last month, we had conflicting signals from the Bank of England with official rhetoric diverging from the central bank's voting record. If all of the PMIs surprise to the upside, the case for a rate hike could slowly build again carving out a bottom for GBP/USD. However if there is even one miss, expect sterling to break below 1.50 quickly and aggressively because traders clearly want to make a run for that level given how many times it has been tested. Construction sector PMI is scheduled for release tomorrow.

Thankto my Followers 'n Friendly Day.
FxCox™