Talking Points:

  • Aussie, NZ Dollars Sink as Yemen Turmoil Drives Risk Aversion
  • US Dollar at Risk if Fed-Speak Underpins Rate Hike Delay Bets
  • Access Real-Time Markets Analysis with DailyFX on Demand

The Australian and New Zealand Dollars underperformed in overnight trade, falling as much as 0.5 and 0.3 percent on average against their leading counterparts. A drop on Asian stock exchanges appeared to be the catalyst behind the slide in the sentiment-linked currencies.

The MSCI Asia Pacific regional benchmark equity index fell more than 1 percent as crude oil surged amid supply disruption fears. The move followed reports that Saudi Arabia began military operations in Yemen. The country sits on the Gulf of Aden, a key transit hub for petroleum from the Persian Gulf.

A quiet economic calendar in European trading hours will probably allow sentiment trends to remain in the driver’s seat. S&P 500 index futures are trading relatively flat in late Asian hours however, hinting that risk aversion may not necessarily carry forward into the session ahead.

Later in the day, “Fed-speak” returns to the spotlight.Comments from James Bullard and Dennis Lockhart, Presidents of the US central bank’s St Louis and Atlanta branches respectively, are on tap. The latter is a voting member of the rate-setting FOMC committee this year.

Traders pushed out the likely timeline for the first post-QE rate interest hike after last week’s FOMC meeting, with Fed Funds futures now pointing to an increase in September (versus the June/July consensus prevailing ahead of the Fed announcement). Rhetoric supporting thisshift may weigh on the US Dollar.

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Asia Session

GMT

CCY

EVENT

ACT

EXP

PREV

No Data

European Session

GMT

CCY

EVENT

EXP

PREV

IMPACT

7:00

EUR

German GfK Consumer Conf (APR)

9.8

9.7

Low

7:45

EUR

French GDP (QoQ) (4Q F)

0.1%

0.1%

Medium

7:45

EUR

French GDP (YoY) (4Q F)

0.2%

0.2%

Medium

9:00

CHF

KOF Institute Spring Economic Forecast

-

-

Medium

9:00

EUR

Euro-Zone M3 s.a. (YoY) (FEB)

4.3%

4.1%

Low

9:00

EUR

Euro-Zone M3 s.a. (3m Avg) (FEB)

4.0%

3.6%

Low

9:30

GBP

Retail Sales Incl. Auto (MoM) (FEB)

0.4%

-0.3%

Medium

9:30

GBP

Retail Sales Incl. Auto (YoY) (FEB)

4.7%

5.4%

Medium

9:30

GBP

Retail Sales Ex Auto (MoM) (FEB)

0.4%

-0.7%

Low

9:30

GBP

Retail Sales Ex Auto (YoY) (FEB)

4.2%

4.8%

Low

11:00

GBP

CBI Reported Sales (MAR)

18

1

Low

Critical Levels

CCY

Supp 3

Supp 2

Supp 1

Pivot Point

Res 1

Res 2

Res 3

EURUSD

1.0736

1.0849

1.0909

1.0962

1.1022

1.1075

1.1188

GBPUSD

1.4642

1.4765

1.4823

1.4888

1.4946

1.5011

1.5134

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

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