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Forex: Aussie, NZ Dollars Sink as Asian Stocks Follow Wall Street Lower

By , Currency Strategist
11 April 2014 04:47 GMT

Talking Points:

  • Aussie, NZ Dollars Sink as on Risk Aversion as Asian Stocks Follow Wall St. Lower
  • Euro May Correct Lower if March’s Final German CPI Print is Revised Downward
  • US Dollar May Find Fuel for a Modest Bounce in PPI, UofM Confidence Figures

The Australian and New Zealand Dollars underperformed in overnight trade, sliding as much as 0.4 and 0.6 percent respectively against their major currency counterparts. The sentiment-linked currencies tracked a selloff across Asian stock exchanges downward. The MSCI Asia Pacific regional benchmark equity index slid 1 percent in a move that seemed to follow on from blood-letting on Wall Street earlier in the day.

The final revision of March’s German CPI reading headlines an otherwise quiet European economic calendar. Initial estimates putting the benchmark year-on-year inflation rate at 1 percent – the lowest since June 2010 – are expected to be confirmed. While deepening disinflation is a familiar narrative for Germany and the Eurozone as a whole at this point, a downward revision may still have some market-moving potential for the Euro if profit-taking is triggered after four consecutive days of gains.

Later in the day, the spotlight shifts to US PPI data and University of Michigan Consumer Confidence gauge. Wholesale inflation is expected to narrowly accelerate in March after hitting a nine-month low in February. The sentiment index is likewise seen posting a mild improvement in April after registered at the weakest level in since November in the prior month. The US Dollar is on pace to produce its worst selloff in six months after five consecutive days of losses. Against such a backdrop, it is feasible that even a tepidly upbeat round of economic data may spark a corrective bounce into the week-end. Securing lasting upward follow-though is another matter altogether however.

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Asia Session

GMT

CCY

EVENT

ACT

EXP

PREV

21:00

NZD

REINZ House Price Index (MoM) (MAR)

3.4%

-

2.1%

21:00

NZD

REINZ House Sales (YoY) (MAR)

-10.0%

-

-7.6%

22:45

NZD

Food Prices (MoM) (MAR)

-0.3%

-

-1.0%

23:50

JPY

BOJ Mar 10-11 Meeting Minutes

-

-

-

23:50

JPY

Japan Money Stock M2 (YoY) (MAR)

3.5%

4.0%

4.0%

23:50

JPY

Japan Money Stock M3 (YoY) (MAR)

2.9%

3.2%

3.2%

23:50

JPY

Domestic CGPI (MoM) (MAR)

0.0%

0.1%

-0.1%

23:50

JPY

Domestic CGPI (YoY) (MAR)

1.7%

1.8%

1.8%

1:30

CNY

CPI (YoY) (MAR)

2.4%

2.4%

2.0%

1:30

CNY

PPI (YoY) (MAR)

-2.3%

-2.2%

-2.0%

3:00

NZD

Non Resident Bond Holdings (MAR)

62.8%

-

61.9%

European Session

GMT

CCY

EVENT

EXP

PREV

IMPACT

6:00

EUR

German CPI (MoM) (MAR F)

0.3%

0.5%

Medium

6:00

EUR

German CPI (YoY) (MAR F)

1.0%

1.2%

Medium

6:00

EUR

German CPI - EU Harmonised (MoM) (MAR F)

0.3%

0.5%

Low

6:00

EUR

German CPI - EU Harmonised (YoY) (MAR F)

0.9%

1.0%

Low

6:45

EUR

French Current Account (€) (FEB)

4.5B

Low

Critical Levels

CCY

Supp 3

Supp 2

Supp 1

Pivot Point

Res 1

Res 2

Res 3

EUR/USD

1.3748

1.3811

1.3849

1.3874

1.3912

1.3937

1.4000

GBP/USD

1.6654

1.6720

1.6753

1.6786

1.6819

1.6852

1.6918

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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11 April 2014 04:47 GMT