Forex News

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Good Morning:

The EUR/USD pair was little changed in the overnight session.  Very narrow range bound trading with no clear direction evident.
GBP had a good day as it jumped over the 1.50 mark versus the USD, and rose across the board.

The SNB will announce their interest rate decision at 8:00 AM. The expectation is for unchanged rates. What will be of interest is if they change the wording on the value of the Swiss Franc.  Will they keep the wording the same at “it would prevent an ‘excessive’ rise in the franc” . The EURCHF is down at 1.4600 level - testing the SNB to address the currency in the comments.  The EURCHF had been using 1.4630 as the floor previously.  If they keep the language look for a further bias to the downside for EURCHF and possibly USDCHF.  The central bank is concerned about too strong a currency being deflationary but if global growth is rebounding,  it may be ok at this moment.  If they keep the language, look for 1.4630 to cap the topside for the EURCHF.

The GBP gained mildly against the USD after the release of a slightly better than expected consumer inflation expectation which read 2.5% versus its prior reading of 2.4%.

The following are statements released from the ECB’s monthly bulletin:

• Euro zone recovery has begun, but likely to be uneven.
• ECB believes risks are broadly balanced with persistent uncertainty.
• They will continue progressive ending of exceptional support measures.
• Abundant liquidity will be absorbed when the time is right.
• ECb says recovery remains on track.

China’s Industrial Production for February came in significantly weaker year over year at +12.8% versus the expectation of +19%, although the YTD release was marginally firmer than expected (20.7% vs. 19.5%.) Producer Prices were also higher than expected, all of which has helped the USD continue its bid this Asian session. On the EUR/USD chart below we see the negative bias against the Euro gradually continue to give the pair lower highs. We will look to see if the trendline resistance shown below can once again hold the pair and whether the mid 1.34 figure will keep on supporting the pair, a break either way could provide a new short-term dynamic for the pair.

The February Australian Unemployment Report came out worse than expected, sending the risk pairs toward session lows. The economywas expected to grow by 15,000 new employees, but February’s job growth expanded by only 400. The employment rate came in as expected at 5.3%. The AUD immediately dropped on the release, however finding support again on the trendlne we reviewed yesterday.

Japan’s 4th quarter GDP reading came in worse than expected, however the market had a limited reaction as risk pairs have traded slightly lower very early in the Asian session. The details of the release are as follows:

GDP (QoQ) - Survey:1.0%   Actual:0.9%   Prior:1.1%

GDP Annualized - Survey:4.0%   Actual:3.8%   Prior:4.6%

Nominal GDP (QoQ) - Survey:0.2%   Actual:0.1%  Prior:0.2%

GDP Deflator (YoY) - Survey:-3.0%   Actual:-2.8%   Prior:-3.0%

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