Daily Forex Market Preview, 27/03/2018
The U.S. dollar continued to extend declines on Monday as the U.S. dollar index was seen falling to fresh monthly low. The declines came amid a slow trading day. Economic data was sparse with only second tier data. The Dallas Fed manufacturing report showed that manufacturing production index fell to 12.7 compared to 27.9 in February. Business activity was also seen weaker with the index posting a print of 21.5 compared to February’s 37.2.
The euro and the Pound sterling posted strong gains as the market expectations on rate hikes strengthened. ECB member Weidmann spoke to reporters yesterday and came out hawkish on monetary policy. Weidmann is widely tipped to be the next ECB President.
Looking ahead, the economic calendar for the day will see the release of the flash inflation data from Spain. Headline consumer prices are forecast to rise 1.5% on the year, accelerating from 1.1% previously.
Later in the day, the Conference Board’s consumer confidence data for the U.S. Consumer confidence is forecast to rise to 131.2, up from 130.8 previously. If the actual data beats estimates, this could be another high in the U.S. consumer confidence as measured by the conference board.
The Richmond Fed will also be releasing the Richmond manufacturing index data. Economists forecast that manufacturing activity in the region slipped to 23 compared to 28 that was registered previously.
GBPUSD 27-03-2018 Intra-day analysis
GBPUSD (1.4235): The British pound edged higher on the day although the momentum was somewhat weaker compared to the euro currency. Regardless, the British pound rose to a fresh monthly high of 1.4244. Any near term declines could see the GBPUSD posting a short term correction to the 1.4162 level in the short term. Establishing support here could see GBPUSD targeting the previous high and potentially breaking out higher in the medium term.