Talking Points:
US Dollar Hoping for a Reprieve from March Fed Meeting Minutes
Pound, Euro Unlikely to Find Fuel in German and UK Trade Data
Aussie and NZ Dollars Higher, China Optimism a Possible Catalyst
The spotlight is on the release of minutes from the March 18-19 FOMC meeting in the hours ahead. That sit-down produced a notably hawkish shift in the central bank’s rhetoric and traders will be keen to parse through the conversation underlying policymakers’ confidence.Evidence pointing to QE cutback continuity can offer a lifeline to the US Dollar after prices dropped by the most in six months yesterday.
The economic calendar is quiet in European hours. February’s trade figures from Germany and the UK are on the docket, with marginal improvements on expected on both fronts. Absent substantial deviations from consensus forecasts, the outcomes seem unlikely to drive Euro and British Pound volatility given their limited implications for near-term ECB and BOE policy bets.
The Australian and New Zealand Dollars popped upward in otherwise quiet overnight trade. The catalyst may have been a larger-than-usual upward revision to the Chinese Yuan reference rate. The PBOC fixed the currency 0.06 percent higher, producing the largest increase in a month.
Beijing has frequently used the exchange rate as a monetary policy tool. In that context, today’s jump in the reference rate can be interpreted as a form of tightening. Markets may have treated this as a sign of confidence in China’s economic outlook, buying currencies of countries whose growth dynamics (and thereby interest rate expectations) are linked to the performance of the East Asian giant.
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Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
22:45
NZD
NZ Card Spending – Total (MoM) (MAR)
-0.2%
–
0.6%
22:45
NZD
NZ Card Spending – Retail (MoM) (MAR)
0.0%
0.4%
0.9%
23:01
GBP
BRC Shop Price Index (YoY) (MAR)
-1.7%
-1.5%
-1.4%
0:30
AUD
Westpac Consumer Confidence (APR)
0.3%
–
-0.7%
0:30
AUD
Westpac Consumer Conf Index (APR)
99.7
–
99.5
1:30
AUD
Investment Lending (FEB)
4.4%
–
-3.7%
1:30
AUD
Home Loans (FEB)
2.3%
1.5%
0.0%
1:30
AUD
Value of Loans (MoM) (FEB)
1.9%
–
1.6%
5:00
JPY
BOJ Monthly Economic Report (APR)
–
–
–
European Session
GMT
CCY
EVENT
EXP
PREV
IMPACT
6:00
EUR
German Trade Balance (€) (FEB)
17.8B
17.2B
Medium
6:00
EUR
German Current Account (€) (FEB)
18.0B
16.2B
Medium
6:00
EUR
German Imports s.a. (MoM) (FEB)
0.1%
4.1%
Low
6:00
EUR
German Exports s.a. (MoM) (FEB)
-0.5%
2.2%
Low
8:30
GBP
Total Trade Balance (£, M) (FEB)
-2100
-2565
Low
8:30
GBP
Visible Trade Balance (£, M) (FEB)
-9200
-9793
Low
8:30
GBP
Trade Balance Non EU (£, M) (FEB)
-3400
-3990
Low
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EUR/USD
1.3632
1.3707
1.3752
1.3782
1.3827
1.3857
1.3932
GBP/USD
1.6400
1.6551
1.6649
1.6702
1.6800
1.6853
1.7004
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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Source: Daily fx