Overall: The dollar found buyers in the overnight market, although not too many. The euro and the swissy were the only pairs able to develop a decent trend, while the rest of the majors put a lot of effort to break free from the first support or resistance area. During the European session, the S&P futures improved and the dollar went into a weakening trend against the higher-yielders as it continued its ascent against the yen. The momentum lasted until President Obama outlined his budget for fiscal 2009, from where U.S. stocks declined off their peak, taking the dollar slightly stronger in the process. But towards the afternoon, equities appeared to have found a base and the majors resumed gaining on the greenback.
In U.S. economic news, orders for durable goods, those designed to last three years or longer, decreased by 5.2% last month to a seasonally adjusted $163.80 billion, the sixth straight monthly decline for this measure. New claims for jobless benefits jumped by 36,000 to 667,000 while the number of workers continuing to claim benefits topped 5 million for the first time on record. Sales of new homes plunged to a record low in January. Purchases fell 10% to a 309,000 annual pace.
The Euro (Eur/Usd) struggled to break above the 1.2750 area during the overnight sessions. The resistance area finally gave up during the European session when S&P futures advanced. The pair traded within a tight range as U.S. stocks basically did the same, making a modest gain from the 09:30 EST Wall Street start.
Consumer confidence in the Euro-area fell to -33, the lowest read since the index first started. The very poor read points to a very clear contraction in the Euro-area. The Euro zone M3 number hit the wires at 5.9% much lower than what analysts had previously estimated. The number for the month of December was revised to 7.5%
The number of unemployed persons looking for a job in Germany for the month of January rose by 40K, less than what analysts had expected. The unemployment number in Germany has been in a strong downtrend since 2005, but it seems the economic slowdown that the German economy faces had reach the job market. The consumer climate in Germany for the month of March 2009 rose unexpectedly. The previous read, for February, was revised slightly higher to 2.3
The Pound (Gbp/Usd) traded around the Asian open price, unable to move decisively in any direction. This happens, after yesterday the pound tumbled nearly 320 pips, and was able to find a bottom near the 1.42 support area. The pair rose in London as S&P futures advanced, but cooled its heels in N.Y. as stocks traded sideways for most of the session.
U.K. house prices have continued to decline for sixteen straight months, falling 17.6% year-over-year. The average price for a U.K. house in February reached £147,746. Analysts believe the bottom in the housing market has not been hit, even though some improvements have been seen in the last months.
The Aussie (Aud/Usd) has been unable to develop a solid trend recently. The aussie traded between the low of the last day of trading, reached in the U.S. session, and the 20-day simple moving average, which has acted as an important swing point for a number of days. The pair traded within a wider range than either the euro or the pound, but ended up about the same--little changed from the start of Wall Street.
The leading index for Australia has decreased 0.9 percent for the month of December, falling to a reading of 114.1. This is the fourth consecutive decrease for the index. The leading index began its descent in September 2008 and it has only accelerated in recent months as the fall rivals levels seen in early 2001
The Cad (Usd/Cad) shed a small number of pips in the Asian and European sessions. The pair fell 30 pips, but failed to break below the neutral pivot point (1.2520). The pair traded mostly higher in N.Y. even as crude futures gained nearly 6% on the day, helped by Wednesday's inventory report which showed increased demand for gasoline for a third week.
The Swissy (Usd/Chf) traded relatively flat during the Asian session and in the early part of the European trading hours. After a quick test at the previous day’s high, in the European session, the swissy started to head lower, falling 50 pips. In the last few days, the swissy traded within the same range. That trend continued in N.Y. as the pair looked to finish just slightly lower for the session.
The Yen (Usd/Yen) went up. It goes up if stocks go up, it goes up if stocks go down, it goes up of stocks go sideways. In other words, it doesn't go down.