Dollar modestly firmer as ranges persist

The dollar was modestly firmer with the dollar index finding support around the base of its daily ichimoku cloud in a relatively quiet NY session. The GBP outperformed following the release of the Bank of England’s MPC minutes which showed a shift in stance as the dovish Posen changed his vote away from more QE. EUR/GBP traded near lows that have not been seen since late Aug. 2010 as the pound gained against the euro. European equities finished in the red amid continued debt concerns and sovereign yields spreads were mixed as EU Commissioner Olli Rehn said that Spain and Italy are taking effective action.

Elsewhere in Europe, the Swiss National Bank (SNB) named Thomas Jordan as its president. Jordan said that the franc is overvalued and that the cap will be defended as it is “vital” for the Swiss economy and price stability. He declined to comment on a possible cap increase and the CHF did not respond much to the comments which have been echoed several times in the past.

The economic data flow in North America was light and the only U.S. data release of note was weekly mortgage applications which rose by +6.9% from the prior -2.4% as the decline in borrowing costs (30-year rate fell to match a record low 4.05%) resulted in refinancing. In Canada, the Bank of Canada’s Monetary Policy Report was released and indicated that the bank projects a “gradual” interest rate rise through 2014. This diverges from the Fed’s commitment to keep rates low through late 2014 and is therefore supportive of a lower USD/CAD. The BOC also said that global uncertainty will have less of an impact on the Canadian economy, which was also noted in yesterday’s policy statement where the bank said that most of its growth will come from private domestic demand. USD/CAD is consolidating higher in an apparent bear flag formation which suggests the potential for a further decline.

U.S. equities fell on earnings with the DJIA declining by about -0.63% and the S&P 500 dropping by about -0.41% to finish the day. Commodities traded softer on the back of a stronger buck with the precious metals gold and silver currently lower by about -0.57% and -0.32% respectively. WTI oil is down about -1.47% at time of writing as U.S. crude oil inventories rose by more than forecast to 3.86M barrels from the prior 2.79M (cons. 1.80M). UST yields are mostly lower with the 10-year yields remaining below the pivotal 2.00% level and USD/JPY similarly faced resistance around the top of its daily cloud and Tenkan line.

Due out tonight are New Zealand 1Q consumer prices which are expected to gain +0.5% q/q (prior -0.3%) and slow to +1.6% on a yearly basis (prior +1.8%). Japan sees the release of its weekly securities investment figures and March trade balance data which is forecast to come in at a deficit of -¥223.2B as exports are anticipated to grow by 0.2% y/y. The JPY is likely to be sensitive to data surprises as disappointing Japanese figures may spur speculation of further easing by the Bank of Japan.

Источник: Forex.com

18.04.2012