Opening Comment 03.18
The session had begun with some broad based USD selling, but in the end, it was not clear which direction the markets were favoring, with the major currencies giving back much of their gains into North American trade, while commodity currencies continued to surge. There have been a lot of concerns over the financial stability in the European economies, including the UK, and it seems as though market participants are content on trading into the commodity bloc which arguably offers higher yields and more stable economic outlooks.
Fed Fisher was out late Wednesday saying the Fed is not at the point yet to change language or policy, and this has marginally weighed on the buck. Meanwhile on the data front, the Tankan survey has come out in Japan and shows manufacturers turning the least pessimistic since June 2008. In Australia, merchandise imports came in softer, but failed to materially factor into price action. The RBA’s monthly bulletin was also released and continued to show the central bank returning to being a net seller of its currency. Famed commodity investor Jim Rogers was out talking down the Euro and Pound, while at the same time plugging the Chinese currency and commodities. Finally, New Zealand consumer confidence was released and came out on the weak side after showing a decline for the second straight month.
Looking ahead, Swiss data kicks things off in Europe, with the trade balance (2.20B expected), exports, and imports out at 7:15GMT, followed by industrial production (5.0% expected) at 8:15GMT. Eurozone current account data then follows at 9:00GMT, with UK mortgage approvals (54k expected), public sector net borrowing (14.0B expected), public finances (11.0B expected), and money supply (0.7% expected) at 9:30GMT. Swiss ZEW and Eurozone trade (-4.0B) are then out at 10:00GMT, with UK CBI industrial trends capping things off at 11:00GMT. With the exception of the Yen, all major currencies are tracking lower against the buck on the day thus far. US equity futures are barely bid, while commodities are mixed with gold higher and oil lower.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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