USD

The two-day rally for the dollar abruptly halted earlier today, with the dollar index (DXY) slipping by 0.35%. The outlook remains uncertain, however, given that markets now fully expect a 25bps hike from the Fed next month. The latest Housing Starts and Building Permits data is expected to reflect further declines in the housing market when released later. This is perhaps not surprising, given substantially higher US interest rates over the past year. 

EUR

Having declined by over 1.1% over the past two days, EUR/USD looks to have found a short-term base and has risen by 0.5% today. The move is all the more remarkable given an unexpected decline in German investor morale. The latest ZEW survey reflected economic sentiment decreasing from 13.0 to 4.1 during March. 

GBP

According to the latest data released earlier this morning, there has been a surprising jump in UK unemployment. Key ILO unemployment unexpectedly jumped from 3.7 to 3.8% over the past quarter, during February. There was also a 28.2K increase in the monthly claimant count during March, coupled with evidence that private sector wage growth has slowed since the end of last year. The pound largely ignored the data, with GBP/USD rallying by over 0.5%. Crucial UK inflation data is set for release tomorrow. 

JPY

Fledgling BoJ governor Ueda continues to promote ongoing YCC measures, fostering a broad weight on the Yen. However, USD/JPY is edging lower, driven by widespread dollar declines. EUR/JPY is a different animal and continues to grind higher after surging by over 2% throughout the past week. 

CAD

The latest inflation data is expected to reflect further moderation after slowing to a 13-month low previously. Coupled with a crucial speech from the BoC governor, Macklem will likely drive a busy day for the Loonie. In the meantime, USD/CAD remains relatively close to the recent low. Moderately higher oil prices are also further boosting the Loonie.

MXN

USD/MXN rallied by around 0.35% yesterday, mainly driven by increasing expectations of a Fed rate hike. However, much of that move has been reversed during the Asian and European morning sessions today. With little paramount economic news due out of Mexico, the pair will most likely take its cues from the dollar side.

BRL

USD/BRL surged by around 0.65% yesterday, as the Real finally posted a decline after surging of late. Fuelling the move was news that the Brazilian Central Bank’s economic activity index had contracted by 0.04% in January. This is usually a good bellwether for essential GDP data and follows the recent slowdown in the Services sector. 

CNY

China’s economy grew by an impressive 4.5% year over year during the first quarter. That beat expectations of 4% growth, driven by surging exports, infrastructure spending, a further boost from retail spending, and a jump in property prices. The big change in China came after the relaxation of pandemic restrictions. The Chinese government also hopes that growth will increase further to around 5% later this year. However, markets seemed less than impressed, with only marginal gains posted amongst Asian stocks. Traders seemed more intent on focusing on the gaps in the data, as opposed to the headline changes, notably a drop in Industrial Production.