Opening Comment 03.31
Overall sentiment still seems to be heavily favoring additional broad based USD gains, with even the Yen seeing some impressive declines against the Greenback over the past several sessions. Any talk of year end repatriation back into Yen has been only that, with Usd/Jpy threatening a push to fresh 2010 highs.
Meanwhile, the Australian Dollar is finally participating in the broader USD rally, with the single currency getting hit in early trade on Wednesday following an unimpressive round of data, highlighted by some abysmal retail sales numbers that put in a negative print after the markets had been looking for something well into positive territory. This in conjunction with some concerning building approvals has resulted in a substantial scaling back of interest rate expectations, with market participants reducing the likelihood for a rate hike next week to 66% from 75% pre-data.
Elsewhere, New Zealand business confidence showed deterioration from the previous set of data, while Japan wage earnings continued to slip, to extend the data series losing streak to 21 months, the worst in six years. Finally, Fed Fisher was on the wires with an upbeat outlook for the economy, but also stressed that the thought of a rate hike at this point was not on the front burner.
Looking ahead, German unemployment data (8k change and 8.2% rate expected) are due at 7:55GMT, followed by Eurozone unemployment (10.0% expected) and CPI (1.1% expected) at 9:00GMT. The Swiss KOF leading indicator (1.90 expected) caps things off in Europe at 9:30GMT. US equity futures are marginally lower, while commodities trade flat.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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