Overall: The currency market lacked a clear direction overnight but more dollar selling was seen after about 07:30 EDT until about 30 minutes after Wall Street opened. Stocks open lower and declined until finding a base at 12:30 EDT, which halted the dollar’s slide.

In U.S. economic news, the number of new claims for unemployment benefits decreased 12,000 last week to 646,000, the Labor Department said today, less than the 652,000 economists had expected to see. However, the number of workers continuing to claim benefits the previous week was revised up by 185,000 to 5,473,000, the highest level since the government started keeping track in 1967.

Also, the Federal Reserve Bank of Philadelphia's manufacturing survey rose to -35.0 this month from -41.3 in February as continued weakness was evident in all of the broad indicators. Last month's reading was the lowest since October 1990.

Finally, the Conference Board's Leading Economic Indicator declined 0.4% in February, following a slight increase in January. Between August 2008 and February 2009, the index fell 2.1% (a -4.1% annual rate), faster than the decline of 1.6% (a -3.1% annual rate) for the previous six months. 

The Euro (Eur/Usd) struggled to break decisively in either direction during the overnight session. In the Asian session, the euro gave some signs it wanted to break lower, but the moves were short-lived. The pair gained over 100 pips after 07:30 EDT, hitting a peak on 1.3737 several hours later, before making a slight decline after stocks moved lower.

The Pound (Gbp/Usd) followed the euro with a move to the upside after 07:30 EDT, hitting a peak on 1.4596 before declining about 60 pips as stocks failed to advance for a second day.

In February, the M4 rose by £21.7 billion, or 1.4%, as analysts had predicted. Year over year, the M4 growth rate is standing at 18.8%. M4 lending excluding the effects of securitizations and loan transfers increased by £28.0 billion, seasonally adjusted in February. The twelve-month growth rate rose to 15.3% from 15.1% in January.

The Aussie (Aud/Usd) fell 70 pips during the Asian session to the neutral pivot point (0.6725), but the aussie started to recover soon after. As with the pound and euro, the pair found buying interest after 07:30 EDT, peaking on 0.6943 around 11:00 EDT.

The Cad (Usd/Cad) started the overnight session caught between the 50 and the 100-day simple moving averages. The pair bounced off the 50-day SMA resistance, fell 50 pips, and broke below the low reached on Wednesday during the overnight session. The pair actually rose in N.Y. even as crude gained 6.7% on the day.

The Swissy (Usd/Chf) traded in a 30-pip range during the Asian session, but moved lower after the London open near the lowest value touched since late January. This happens, despite the SNB intervening in the currency market in the last few days. The pair began rising about an hour after Wall Street opened, hitting a peak on 1.1272 before declining slightly.

The Zew Indicator for Switzerland, gauging analysts’ economic expectations, remained mostly unchanged in March. However, the indicator for the assessment of the current economic situation in Switzerland continued to worsen in March. The respective indicator drops 11.8 points and also reaches the minus 57.1 mark.

The Swiss trade balance surplus declined again in January. Compared with the estimated number, the trade balance was released lower, 0.73B versus 1.01B. In January, the report was revised slightly lower, to 1.99B.

The Yen (Usd/Yen) was among the few pairs that moved decisively during the overnight session. The pair fell 100 pips during the Asian session, and actually managed to break below Wednesday’s low. Additionally, the pair broke below the low touched on March 12. The pair followed the swissy higher in N.Y., hitting a peak on 94.53 before retreating slightly.

The Japanese all industry activity index came in at negative 1.7 percent for the month when compared to the previous month. The index fell less than the expected 2.0 percent economists had expected. The decrease was led by a drop in the industrial production index by 11.3 percent while the services sector increased 0.4 percent.