Dollar Down On Data Weakness
Over the European morning on Wednesday, the US dollar suffered a strong reversal. This came after weaker than expected manufacturing and industrial production readings for March.
Looking ahead to today’s US session the only key domestic US print is the February trade balance reading. That being said, we do also have a host of Fed members speaking and it will be worth keeping an eye on those. The index trades 96.53 last, still above last week’s 96.37 low.
EUR Climbs On Dollar
EURUSD trades higher again today, taking advantage of USD weakness. Price continues the recovery rally off 1.1186 lows. Final March CPI readings today came in unchanged from their estimate, doing little to disturb price action. However, price has been struggling to move meaningfully higher. This is due to concerns over the health of the eurozone which remains an obstacle.
Weak UK CPI Weighs on GBP
GBPUSD is trading lower today in the wake of lower than expected March CPI readings. These saw the core number printing 1.8% vs 1.9% expected. The headline reading printed 1.9% vs 2% expected. GBPUSD trades 1.3033 last, moving back down towards the 1.30 support level which has underpinned price action over recent months.
Trade War Issue Returns
Risk sentiment remains buoyant today with US equities trading in the green again. This is largely thanks to US/China trade deal optimism which continues to provide support. However, there are some concerns lingering. Trump recently announced fresh EU trade tariff threats which have brought the issue of trade wars back into focus.
For now, SPX500 trades 2912.48 as it continues to grind back up to all-time highs. The GER30 is clearly unphased by Trump’s threats as it continues yesterday’s breakout above the 12039.9 level to trade 12113.2 last.
Gold Up, JPY Down
It’s another day of mixed trading for the safe havens with gold slightly higher against the US dollar. Meanwhile, JPY is lower again. After breaking down through the 1280.58 support level yesterday, gold prices recovered this morning.
However, the rally stopped just shy of retesting the level. USDJPY continues to put pressure on the 112.16 level. This is because, despite USD weakness, the reaffirmed BOJ dovishness is keeping JPY pressured.
Crude Rises on Bullish Oil Report
Crude oil prices returned to strength midweek. The latest report from the API highlighted an unexpected draw in crude stockpiles. Traders are now looking for confirmation from today’s EIA report. However, crude is already trading back above 64.38 on speculative demand.
Stronger Oil Lifts Commodity Currencies
The Canadian Dollar is benefiting from the combination of a weaker US dollar and higher oil prices today. USDCAD is turning lower from the 1.3377 resistance to trade 1.3323 last. Looking ahead to today’s US session, we have Canadian CPI due which could further lift CAD if we see an increase.
AUDUSD is also rallying strongly today as traders make the most of better oil prices and a softer USD. Price is trading back up to test the .72 resistance, briefly piercing the level earlier. A raft of better than expected Chinese economic readings overnight are also keeping AUD supported with Chinese industrial production and Q1 GDP both beating estimates.