USD Climbs As European Markets Shake

The GBP/USD and The USD strengthened in a week that saw the EUR/USD and The Yen decline. The US economy continued to show promising data, as post-winter dollar rally gave solid indication economy was starting to pick up some pace after severe freezing which reportedly took 100.000 jobs out of the US economy. Manufacturing and Retail sectors were among major winners, reflecting the recent pick up in the labor market. Among major highlights last week was solid performance of Philly Fed’s index, giving more evidence of a spring bounce. The widely-watched benchmark of manufacturing activity rose to 16.6 in April, up from the 9.0 published in March. The index has improved markedly from the 1-year- low reading of 6.3 published in February that was blamed on severe freezing. Economists stay optimistic with future projections, stating that more gains are likely to come in May as the gaping wound brought by harsh blizzards is gradually healing.

In the Eurozone, Mario Draghi managed to send the euro down in a Sunday gap, and the common currency never recovered. GBP enjoyed a sharp drop in the UK unemployment rate to reach new multi-year highs. The kiwi stayed behind after weak inflation figures and the Loonie took the other direction on positive ones

WEDNESDAY April 23

US New Home Sales: Wednesday, 14:00. The number of transactions for the purchase of new homes declined to the annualized number of 440k, with the drop mainly attributable to severe weather conditions. However, the spring is out there and with the overall increase in consumer activity the housing market should pick up as well. New home sales are expected to pick up to 455k this time. Any number going in line with estimates would add to the confidence in the US economy and may offer some signals on the short-term charts.

Assets to trade the event: USD/CHF, USD/JPY, USD/CAD

THURSDAY April 24

German Ifo Business Climate: Thursday, 8:00. The IFO business sentiment dropped for the first time in five months in March, as escalating tensions between Russia and Ukraine took a toll on the investor confidence in Europe. Investors are concerned about the repercussions that the German economy may face should the EU impose more sanctions on Russia. Germany receives lots of gas and oil from Russia, so worries are definitely not out of place. German business sentiment is expected to edge down to 110.5.

Assets to trade the event: EUR/USD, EUR/JPY, DAX, CAC 40

Mario Draghi speaks: Thursday, 9:00. Now, as the ECB has clearly expressed its intentions to devalue the Euro, the ECB chief will give press conference in Amsterdam. Low inflation and worries about higher Euro hurting the economy are expected to be among primary topics of the talks. Will he impose heavy pressure on Euro again?

Assets to trade the event: EUR/USD, EUR/GBP, EUR/JPY