Dollar Sold as Traders Discount Fed Minutes, Eye Claims Data

by Admin

The US Dollar is facing heavy selling pressure as traders shrug off a supportive set of Fed meeting minutes and look to Jobless Claims data to bolster QE bets.

Talking Points

  • US Dollar Falls as Traders Discount FOMC Minutes, Jobless Claims in Focus
  • New Zealand Dollar Soars as FinMin English Hints at RBNZ Rate Hikes Ahead
  • Australian Dollar Swiftly Shrugs Off Disappointing March Employment Data

The US Dollar is facing broad-based selling pressure as traders discount earlier gains following the release of minutes from the March FOMC meeting. Policymakers appeared to signal they were increasingly prepared to taper asset purchases and perhaps even end them in line with improvements in the labor markets, sparking a knee-jerk advance in the greenback amid easing dilution fears. Investors appear to have reconsidered as the vaguely supportive rhetoric is sized up against last week’s dismal NFP figures, hinting anti-QE sentiments may be old news at this point.

The economic calendar is relatively quiet in US trading hours, with weekly Jobless Claims figures headlining an otherwise lackluster docket. Economists’ forecasts call for a slight improvement on the closely-watched Initial Claims print, but a downside surprise in line with the deterioration in US news-flow relative to expectations since late March may further reinforce Fed QE continuity bets and compound downward pressure on the greenback.

The New Zealand Dollar is outperforming on the back of supportive comments from Finance Minister Bill English, who said a sustained push higher in housing prices may stoke inflation and trigger an RBNZ interest rate hike. English explicitly added at that while such a move was likely to lead the Kiwi, “many exporters” were coping with the stronger currency and predicted the exchange rate would turn more favorable when US monetary policy begins to tighten.

The Australian Dollar briefly dipped overnight following a disappointing set of March employment figures but prices quickly recovered as traders digested the outcome’s limited implications for RBA monetary policy. While the 36.1K net decline in hiring marked the worst single reading in a decade, looking past month-to-month reveals a far more forgiving picture. Indeed, the first quarter posted a net jobs gain of 51k, the largest increase in a year.

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Asia Session:

GMT

CCY

EVENT

ACT

EXP

PREV

22:30

NZD

Business NZ PMI (MAR)

53.4

56.3

23:50

JPY

Japan Money Stock M2 (YoY) (MAR)

3.0%

2.9%

2.9%

23:50

JPY

Japan Money Stock M3 (YoY) (MAR)

2.5%

2.4%

2.4%

23:50

JPY

Domestic CGPI (MoM) (MAR)

0.1%

0.2%

0.5%

23:50

JPY

Domestic CGPI (YoY) (MAR)

-0.5%

-0.4%

-0.1%

23:50

JPY

Machine Orders (YoY) (FEB)

-11.3%

-7.6%

-9.7%

23:50

JPY

Machine Orders (MoM) (FEB)

7.5%

6.9%

-13.1%

1:00

AUD

Consumer Inflation Expectation (APR)

2.2%

2.3%

1:00

CNY

Aggregate Financing (CNY) (MAR)

2540.0B

1800.0B

1065.9B (R-)

1:00

CNY

Foreign Exchange Reserves (MAR)

$3440.0B

$3361.0B

$3311.6B (R+)

1:00

CNY

New Yuan Loans (MAR)

1060.0B

900.0B

620.0B

1:00

CNY

Money Supply – M0 (YoY) (MAR)

12.4%

12.7%

17.2%

1:00

CNY

Money Supply – M1 (YoY) (MAR)

11.9%

9.4%

9.5%

1:00

CNY

Money Supply – M2 (YoY) (MAR)

15.7%

14.6%

15.2%

1:30

AUD

Employment Change (MAR)

-36.1K

-7.5K

74.0K (R+)

1:30

AUD

Unemployment Rate (MAR)

5.6%

5.4%

5.4%

1:30

AUD

Full Time Employment Change (MAR)

-7.4K

19.3K (R+)

1:30

AUD

Part Time Employment Change (MAR)

-28.7K

54.7K (R+)

1:30

AUD

Participation Rate (MAR)

65.1%

65.2%

65.3%

2:00

JPY

Tokyo Avg Office Vacancies (%) (MAR)

8.56

8.57

2:30

NZD

REINZ House Sales (YoY) (MAR)

10.9%

7.5%

2:30

NZD

REINZ Housing Price Index (MoM) (MAR)

2.4%

1.6%

2:30

NZD

REINZ Housing Price Index (MAR)

3631.4

3544.9

Euro Session:

GMT

CCY

EVENT

EXP/ACT

PREV

IMPACT

6:00

EUR

German Consumer Price Index (MoM)

0.5% (A)

0.5%

Medium

6:00

EUR

German Consumer Price Index (YoY)

1.4% (A)

1.4%

Medium

6:00

EUR

German CPI – EU Harmonised (MoM)

0.4% (A)

0.4%

Low

6:00

EUR

German CPI – EU Harmonised (YoY)

1.8% (A)

1.8%

Low

8:00

EUR

ECB Publishes Monthly Report

Low

9:00

EUR

Italy to Sell 7.5B in 2016, 2017 and 2028 Bonds

Medium

Critical Levels:

CCY

SUPPORT

RESISTANCE

EURUSD

1.3041

1.3220

GBPUSD

1.5303

1.5423