Dollar Weakened As Gold Extends Rebound

The dollar is broadly lower in Asian session today, as commodities stage further rebound. Gold is back above the 1440 level, which is more than 9% above last week's low of 1321.5. Meanwhile, crude oil is also back pressing 92 level, which is more than 7% above last week's low of 85.61. In the currency markets, dollar is broadly lower against other major currencies except yen. EUR/USD is back above 1.305 level and GBP/USD is back above 1.533. USD/CAD also dips sharply today and is back at 1.023 while AUD/USD recovers strongly to 1.032. Technically, the the depth of the pull back in dollar argues that it might have topped in near term and we'll keep an eye on the development today.

UK GDP is a major focus today and is expected to show 0.1% qoq growth in Q1, following -0.3% contraction back in Q4. Any downside surprise today could send the U.K. back into recession which should then be qualified as a triple dip recession. On Wednesday, the BoE announced an expansion of its Funding for Lending Scheme to help small businesses. The program will now last until January 2015. Current BoE governor King said that the FLS revamp will give banks "continued assurance against the risk that market funding rates increase, especially in the light of continued uncertainty in the euro area," and will "help to maintain easier funding conditions for banks into 2015, and thereby help to support credit conditions and the recovery."

In the eurozone, ECB vice president Constancio said that the central bank is "ready to act if economic conditions continue to provide bad news, as unfortunately has been the case in recent data that became available". He noted that monetary policy will "continue to be accommodative to respond to the present conditions in which inflation is going down in a significant way." There were speculations of rate cuts from the ECB as soon as next week, after a string of weak economic data . But so far, the selloff in euro is quite limited.

Other data due today: theU.K. services index and U.S. jobless claims.