The Forex daily summary for 30 March features the following key notes:
- Switzerland KOF leading indicator 90/8 vs. 90.3
- UK mortgage approvals 61.8k vs. 61.5k
- Germany CPI m/m 0.5% vs. 0.4%; CPI y/y 0.3% vs. 0.3%
- Canada IPPI m/m 1.8% vs. 0.5%; Raw materials index m/m 6.1% vs. 5%
- US Core PCE m/m 0.1% vs. 0.2%; Core PCE y/y 1.4% vs. 1.3%
Later
- ECB QE purchase announcement
- US Pending home sales
- UK Gfk consumer confidence
The currency markets were choppy today with lack of any market moving events from Asia. The main overriding theme was Friday’s statement from Fed Chair Janet Yellen, who reiterated that the US economy is on track for an interest rate hike this year, albeit at a cautious and gradual hike path.
The Australian and Kiwi dollars were relatively weak early into Monday’s Asian trading session as the Aussie dropped from lows of 0.775 to trade near 0.765, while the Kiwi Dollar also fell from the opening session to trade near 0.752 levels. The Aussie dollar was weak as the currency fell across the board, especially against the Greenback, the Japanese Yen, the Euro and the British Sterling.
The Yen was mostly mixed across the board, but was showing signs of weakening against a stronger Greenback.
The European session was also light with no major news events scheduled. The only risk for the day was the German CPI numbers which managed to rise above estimates. The Euro was mixed however, but managed to remain on a firm footing against a weaker British Pound.
The GBPUSD pair was finally showing signs of breaking down from its range, after the currency was seen trading near 1.478 levels, having broken the previous support at 1.482. The Cable could now potentially target the next support at 1.47225, followed by 1.4635. However, it is likely that the GBPUSD continue to range before any clear direction is established.
Gold prices also fell for the day, as the precious metal failed to break the resistance at 1203 levels and was seen trading sharply lower near 1185 levels.
Crude oil and Brent both, which were trading above $49 and $50 respectively last week, also trimmed their gains as the outlook turns negative. While Oil futures were briefly boosted by the news of the Saudi airstrikes on Yemen last week, the ongoing negotiations with Iran seem to weigh in on the supply factor as a positive outcome would see the markets also flushed with more supply from Iran.
The US trading session saw the release of the much watched PCE data, the Fed’s preferred gauge of inflation. Core PCE on an annualized basis rose above estimates of 1.3%, to 1.4% as the markets conceive this to be the signal for Fed’s argument of being ‘reasonably confident‘.
The Greenback held on to its gains after managing to lift off from the lows of last week. The Dollar Index was trading near 98.2 levels and looks poised for further upside gains ahead of the key March jobs report due later this week.
