CAD Drops, GBPUSD Reclaims 1.30, USD Selling on Month-End Flows - US Market Open
USD: The USD is on the defensive, down 0.3% as the index tests 97.50. Month-end flows have been among the main factors behind the decline in the USD index with investment bank FX rebalancing models pointing to USD selling across the board, which in turn has seen both the Euro and GBP break above 1.12 and 1.30 respectively.
EUR: A rare occurrence of better than expected Eurozone data has helped keep the Euro supported. Eurozone GDP surprised to the upside with Spanish beating estimates and French growth in line with forecasts. Elsewhere, German CPI saw a sizeable jump to 2.0%, from the prior month of 1.3%, consequently providing upside risks to the Eurozone inflation report. Italian GDP also provided a welcome surprise with the country confirmation that it has exited its technical recession.
GBP: The Pound is the notable outperformer, making a firm break above the 1.30 handle amid the drop in the USD index as month-end rebalancing flows dominate. As a reminder, investment bank models had pointed to strong GBP buying. Consequently, with the upside in the Pound, EURGBP has edged towards 0.86.
CAD: The Canadian Dollar pared its initial oil led gains after the latest GDP data had showed that Canada had contracted in February, which in turn boosts that Bank of Canada’s case to keep interest rates on hold.
Source: Thomson Reuters, DailyFX
DailyFX Economic Calendar: – North American Releases
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--- Written by Justin McQueen, Market Analyst
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