The US dollar was able to hold on to its gains and go for more when risk aversion extended its stay in the financial markets. Data from the US economy came in mixed, as the Philly Fed index fell from 12.4 to -1.6 instead of just dipping to 8.1 while initial jobless claims came in at 247K, lower than the projected 265K increase in joblessness. There are no major reports due from the US today so earnings data could play a role in dollar price action and market sentiment.
The euro had a volatile run even after the ECB decided to keep monetary policy unchanged as expected. Price spiked around during the ECB press conference when Draghi acknowledged a few signs of improvement but admitted that inflation might even turn negative. He emphasized that the central bank will employ all monetary tools if necessary. Euro zone PMI readings are up for release today and improvements are expected from the manufacturing and services sectors of France and Germany.
The pound was unable to hold on to its gains when the UK retail sales report came in weaker than expected. Consumer spending fell 1.3% instead of just 0.1% while the February figure was downgraded to show a larger decline of 0.5% from the initial 0.4% drop. Public sector borrowing fell from 6.3M GBP to 4.2M GBP, indicating some improvement in government debt. There are no reports due from the UK today.
The franc continued to lose ground against its peers when the Swiss trade balance printed a smaller than expected surplus of 2.16B CHF compared to the estimated 3.89B CHF surplus. In addition, the previous month’s reading was downgraded. There are no major reports due from Switzerland today.
The yen was able to take advantage of the run in risk aversion yesterday, gaining ground against the dollar as well. Earlier today, the flash manufacturing PMI printed a weaker than expected result of 48.0 from the previous 49.1 reading. Analysts had expected a climb to 49.6. The tertiary industry activity figure is up for release and a 0.4% drop is eyed.
Commodity Currencies (AUD, NZD, CAD)
The comdolls returned some of their recent wins when crude oil prices retreated on the news that Libya is set to double its oil production upon the formation of a new government. Data from New Zealand showed improvements in credit card spending and job opportunities. Canadian CPI and retail sales figures are up for release today. Headline CPI could rise by 0.3% while core CPI could increase by 0.4%. Headline and core retail sales are expected to post 0.8% declines.