OPEN
HIGH
LOW
LAST
PRICE
CHANGE %
USDOLLAR Index
10534.65
10563.66
10504.47
10550.64
0.144085
EURUSD Curncy
1.3034
1.3065
1.2924
1.2959
-0.57542
GBPUSD Curncy
1.4903
1.4982
1.4893
1.4924
0.140911
USDJPY Curncy
96.08
96.26
95.45
96.09
0.010408
AUDUSD Curncy
1.0324
1.0334
1.0282
1.0306
-0.17435
The Dow Jones FXCM Dollar Index rallied on Euro and Australian Dollar weakness on the day. Outlook for the US Dollar remains positive amid signs of US economic recovery and risks in the Asia-pacific region.
On the US front, recent business, consumption, payroll and employment data all improved and beat expectations, signaling that the US recovery remains firm. Today’s US Advance Retail Sales data and Thursday and Friday’s US Producer and Consumer Price Index inflation reports should set the tone for next week’s US Federal Reserve interest rate decision. If the February PPI release and Initial Jobless Claims data beat expectations, we expect the US Dollar may extend declines.
In the Asia-pacific region, potential changes in China, the world’s second largest economy, may bring high volatilities to the majors. Comments from central bank Governor Zhou Xiaochuan yesterday indicate that the PBOC has shifted its focus to fighting inflation and maintaining price stability. This increases the likelihood of further PBOC monetary policy tightening as well as more restrictive fiscal policy from the government. The combination could thereby reduce domestic consumption and have a particularly negative effect on the Australian economy. The Australia Dollar could see further downside pressure as a result.
Another top market driver from China will be the announcement of the next central bank chief within two days. As a leader in the reform in banking and financial system, Chief Zhou did not exclude the chance of keeping his current position during yesterday’s press conference. If it is the case, his extension would provide stability when China is grappling with sustaining an economic recovery. A new governor, on the other hand, will bring more uncertainties to the market and investors may seek safety—benefiting the safe-haven US dollar in short-term trading.
Economic Calendar
Date
Time
Currency
Event
Importance
Forecast
Previous
Thu
Mar 14
00:30
AUD
Unemployment Rate
(FEB)
High
5.5%
5.4%
12:30
USD
Producer Price Index (YoY) (FEB)
High
1.7%
1.8%
12:30
USD
Initial Jobless Claims
Medium
350k
340k
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Written by David Rodriguez and Renee Mu, DailyFX Research Team
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Source: Daily fx