Dollar still plagued by US data; UK inflation to trigger rate cut

Despite the recent strength of the dollar off its lows, US economic data continues to plague the greenback. The UK CPI is expected to come out at 3% which is what is triggering the market’s 80% chance of a rate cut on April 10th.


News and Events:
Despite the recent strength of the dollar off its lows, US economic data continues to plague the greenback as traders look forward to much anticipated ISM manufacturing and Non-Farm Payrolls on Friday. There will be particular focus on Fed Chairman Bernanke testifying before the congressional Joint Economic Committee on Wednesday. Traders will listen on the Chairman’s view of the economy as well as his outlook for the remainder of the year.

The British Pound is facing challenges of its own as the House of Commons Treasury Select Committee’s assessment of the UK economy is not as optimistic as originally thought due to continued spill-over effects from the credit market crisis and inflation concerns. The CPI is expected to come out at 3% which is what is triggering the market’s 80% chance of a rate cut on April 10th.




Today's Key Issues (time in GMT):

09:00 EUR PMI Manufacturing MAR F 52 vs 52
09:00 EUR PMI Manufacturing MAR F 54.9 vs 54.9
09:00 EUR Hourly Wages (MoM) FEB

09:30 GBP PMI Manufacturing MAR 51 vs 51.3

10:00 EUR Euro-Zone Unemployment Rate FEB 7.10% vs 7.10%

13:30 CAD Industrial Product Price MoM FEB 0.70% vs 0.90%
13:30 CAD Raw Materials Price Index MoM FEB 2.70% vs 3.40%

15:00 USD ISM Manufacturing MAR 47.5 vs 48.3
15:00 USD ISM Prices Paid MAR 75 vs 75.5
15:00 USD Construction Spending MoM FEB -1.00% vs -1.70%

17:00 EUR New Car Registrations (YoY) MAR

18:00 EUR Budget Balance MAR
18:00 EUR Budget Balance (Year to date) MAR

22:00 USD ABC Consumer Confidence Mar-30



The Risk Today:

EurUsd is coming off a double top at 1.589 with a first target of 1.5620 and ultimately 1.5400 on the bottom of the sideways channel.

GbpUsd still in a downtrend with the possibility of a retracement to 2.0000 and 2.0100. Risk remains high of a move down to 1.9355.

UsdJpy expecting a short Winnipeg trade at 101.80 as it bounces off a major trend-line with a target of 96.00.

UsdChf caught in a consolidation phase for now, expect a sideways market with 0.9755 as support and 1.0350 resistance.


Resistance and Support:




By James Brandt - ACM Advanced Currency Markets, Geneva, Switzerland