Pulse of the Market
· U.S Dollar appears to be regaining its footing as the economic docket reinforces an improved outlook
· Euro capped gains as fears near the sovereign debt crisis continued to bear down market sentiment
· BoE to meet on ground the drop in interest rate expectations may continue to instill a bearish outlook
· The Australian Dollar has appreciated nearly 5% against the Greenback in just the past ten trading days
The Greenback strengthened in yesterday’s trading session as U.S consumer spending increased more than forecast in February, and after Fed Bullard said the central bank may consider ranging back its monetary stimulus. Consumer spending in the U.S increased in February as incomes climbed, helping to bolster the expansion in the world's largest economy. Purchases increased to 0.7%, the most since October after advancing 0.3% in the previous month. Yesterday Expenditure Core, which excludes food and energy, rose 0.2% for a second month, and was up 0.9% from a year earlier, the biggest gain since October. The Single Currency ended yesterday’s trading session almost unchanged against the U.S Dollar on uncertainty surrounding Portugal and a setback for German leader Angela Merkel. The Euro backed away from four and a half month peak last week at $1.4249 to just above $1.41 yesterday following the defeat of Chancellor Merkel's party in regional elections. The setback is viewed as limiting her ability to assist other troubled European countries. Euro sentiment was also dented after Portugal failed to pass its austerity package last week prompting a resignation by Prime Minister Jose Socrates. Ratings agencies S&P and Fitch both downgraded the country last week causing its funding costs to soar, leading many to believe a bailout is all but inevitable. Cable extended its four day losing streak against the U.S Dollar yesterday after a report showed U.K business confidence slipped to its weakest in two years. The Cable fell to its lowest levels in nearly eight weeks against the Greenback ahead of a report scheduled to release today that is expected to show that the U.K economy contracted 0.6% in fourth quarter. Yen fell against all its major counterparts on signs the global recovery is gaining momentum, boosting appetite for higher yielding investments. Australian Dollar raced to a fresh all time high against the U.S Dollar yesterday as commodity prices pushed higher. The Aussie has appreciated nearly 5% against the U.S Dollar in just the past ten days as investors expect demand for base metals and coal, Australia's main exports, to only increase as Japan, the second largest destination for Australian goods, begins to rebuild from the devastating earthquake and tsunami earlier this month.
Time(GMT) | Economic Release | IM | Actual | Forecast | Prior |
| | German Consumer Price Index (YoY) (MAR) | High | | 2.1% | 2.1% |
| 00:00 | Australia HIA New Home Sales (MoM) (FEB) | Medium | 0.6% | | 2.5% |
| 01:05 | Japan Small Business Confidence (MAR) | Low | 49.5 | | 46.6 |
| 08:30 | U.K Gross Domestic Product (QoQ) (4Q) | High | | -0.6% | -0.6% |
| 13:00 | U.S S&P/Case-Shiller Home Price Index (JAN) | Low | | | 142.42 |
| 14:00 | U.S Consumer Confidence (MAR) | High | | 66 | 70.4 |
| 23:50 | Japan Industrial Production (MoM) (FEB) | Medium | | -0.1% | 1.3% |
Euro
The Single Currency ended yesterday’s trading session slightly higher against the U.S Dollar. ECB President Trichet inspired a fresh rally in the Euro across the board stating that inflation was beginning to show signs of being unrelenting. EUR/GBP hit multi month highs above 0.8820. German political concerns and Portugal bailout suggestions are being overlooked for now. Overall the EUR/USD traded with a low of 1.4021 and a high of 1.4114 before closing the day around 1.4087 in the New York session.
Yn
The Japanese Yen fell against all its major counterparts yesterday on signs the global recovery is gaining momentum, boosting appetite for higher yielding investments. EUR/JPY pushed back above 115.00 Yen. USD/JPY resistance was found at 81.80 Yen before stabilizing. GBP/JPY has been underperforming in recent session as Cable fell back but is holding above 130.00 Yen. Overall the USD/JPY traded with a low of 81.43 and a high of 81.83 before closing the day around 81.67 in the New York session.
British Pound
The British Pound extended its four day losing streak against the U.S Dollar as Monetary Policy Committee member Posen talked down the inflation threat and GBP/USD broke below 1.6000. Broad British Pound weakness has been seen in recent sessions with the market struggling to find buyers on most pairs. Overall the GBP/USD traded with a low of 1.5935 and a high of 1.6037 before closing the day at 1.5992 in the New York session.
Canadian Dollar
The Canadian Dollar remains near the top of its recent ranges as the price of oil continues to rise. With persistent violence in Libya, and increased tensions across the region, investors fear that a more significant disruption in the flow of oil, Canada's primary export, could be forthcoming. A surge in personal spending and rising incomes in the U.S has also provided support for the Loonie. Overall the USD/CAD traded with a low of 0.9739 and a high of 0.9819 before closing the day at 0.9774 in the New York session.
Euro-Yen
EURJPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also issuing a bullish stance. The RSI is above 56 and lies above the neutral zone. Overall the cross has gained 0.42%.
Sterling-Yen
Currently GBPJPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing bullish and MACD is indicating a bearish stance. The RSI is above 46 reading and lies below the neutral zone. The pair has gained 0.18%.
Aussie-Yen
Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic gives bullish and MACD is also indicating a bullish stance. The RSI is above 57 reading and lies above the neutral region. The cross has gained 0.19%.
Euro-Sterling
This cross is trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish and MACD is also issuing a bullish signal. The RSI is above 67 reading and lies above the neutral region. The pair has gained 0.24%.
Sterling-Swiss
This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The RSI is above 39 and lies below the neutral region. The pair has lost 0.53%.
Appendix
| Daily Pivot Points | |||||||
| | Trading Range | | |||||
| Contract | S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
| EUR/USD | 1.3941 | 1.3981 | 1.4034 | 1.4074 | 1.4127 | 1.4167 | 1.4220 |
| USD/JPY | 81.06 | 81.24 | 81.46 | 81.64 | 81.86 | 82.04 | 82.26 |
| GBP/USD | 1.5837 | 1.5886 | 1.5939 | 1.5988 | 1.6041 | 1.6090 | 1.6143 |
| USD/CHF | 0.9052 | 0.9102 | 0.9134 | 0.9184 | 0.9216 | 0.9266 | 0.9298 |
| USD/CAD | 0.9656 | 0.9697 | 0.9736 | 0.9777 | 0.9816 | 0.9857 | 0.9896 |
| EUR/JPY | 113.32 | 113.76 | 114.41 | 114.85 | 115.50 | 115.94 | 116.59 |
| GBP/JPY | 129.42 | 129.83 | 130.23 | 130.64 | 131.04 | 131.45 | 131.85 |
| CHF/JPY | 87.53 | 87.91 | 88.48 | 88.86 | 89.43 | 89.81 | 90.38 |
| AUD/JPY | 82.47 | 82.92 | 83.29 | 83.74 | 84.11 | 84.56 | 84.93 |
| EUR/GBP | 0.8714 | 0.8737 | 0.8772 | 0.8795 | 0.8830 | 0.8853 | 0.8888 |
| EUR/CHF | 1.2784 | 1.2837 | 1.2875 | 1.2928 | 1.2966 | 1.3019 | 1.3057 |
| GBP/CHF | 1.4471 | 1.4555 | 1.4609 | 1.4693 | 1.4747 | 1.4831 | 1.4885 |
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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