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Pound to Look Past Claims Data, US Dollar Set Sights on CPI Report

Pound to Look Past Claims Data, US Dollar Set Sights on CPI Report

Talking Points:

  • British Pound Unlikely to Find Lasting Driver in March Jobless Claims Data
  • US CPI Figures Probably Don’t Have Scope to Meaningfully Boost US Dollar
  • See Economic Releases Directly on Your Charts with the DailyFX News App

UK Jobless Claims data headlines the economic calendar in European hours. Expectations point to a 25.5k drop in applications for benefits. Such an outcome would fall broadly on-trend and so seems unlikely to generate a significant response from the British Pound in that it would do little to augment investors’ BOE policy outlook. Traders will likely have to wait for the release of minutes from the central bank’s April meeting next week for the next major inflection point on the domestic front.

Later in the day, the spotlight shifts to the March set of US CPI figures. The core year-on-year inflation rate is expected to register at 1.7 percent, unchanged from the prior month. Traders will look to the outcome to inform continued speculation about the timing of the first post-QE Federal Reserve interest rate hike. A print north of expectations may weigh against the recent dovish shift in the priced-in outlook, offering a lifeline to the US Dollar after three days of aggressive losses. Leading survey data points to weakness on the pricing front however, warning that a soft result may keep the greenback under pressure into the week-end.

The Australian Dollar underperformed in overnight trade, sliding as much as 0.4 percent on average against its leading counterparts. The move tracked a slide in Australia’s benchmark 10-year bond yield. Price action on both fronts may be little more than a correction following the surge in borrowing costs as well as the Aussie following an impressively strong jobs report yesterday however, so the probability for follow-through seems suspect.

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Asia Session

GMTCCYEVENTACTEXPPREV
5:00JPYConsumer Confidence Index (MAR) 41.741.340.7

European Session

GMTCCYEVENTEXP/ACTPREVIMPACT
7:15CHFRetail Sales Real (YoY) (FEB)--0.3%Low
8:00EURECB Current Account SA (FEB)-30.5BLow
8:00EURCurrent Account NSA (FEB)-8.8BLow
8:30GBPClaimant Count Rate (MAR)2.3%2.4%High
8:30GBPJobless Claims Change (MAR)-29.5K-31.0KHigh
8:30GBPAverage Weekly Earnings (3M/Y) (MAR)1.8%1.8%Low
8:30GBPWeekly Earnings ex Bonus (3M/Y) (MAR)1.7%1.7%Low
8:30GBPILO Unemployment Rate (3Mths) (MAR)5.6%5.7%Medium
8:30GBPEmployment Change (3M/3M) (MAR)170K143KLow
9:00EURCPI (MoM) (MAR)1.1%0.6%Medium
9:00EURCPI (YoY) (MAR F)-0.1%-0.1%Medium
9:00EURCPI Core (YoY) (MAR F)0.6%0.6%Medium

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3
EURUSD1.03491.05421.06521.07351.08451.09281.1121
GBPUSD1.45921.47491.48411.49061.49981.50631.5220

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

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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