Daily Summary on USD, EUR, JPY, GBP, AUD, CAD and NZD

v EUR traded higher after better-than-expected German business confidence

v Commodity Currencies hit new highs despite some dovish outlook on interest rates

The USD traded lower against most major currencies today after positive German data and a better-than-expected UK retail sales report boosted risk appetite. Furthermore, this week's release of softer employment, manufacturing, and housing data in the US, further dampened the demand for the dollar. With very light data out from the North American region today, the market will look to the upcoming G20, IMF, and World Bank meetings for direction on the dollar. Moreover, markets will be focused on next week's releases which will include consumer confidence, new home sales, jobless claims, and GDP data in the US; all of which are expected to decline modestly.

The EUR advanced against the dollar today after German business confidence unexpectedly increased to a nine month high. The German IFO survey printed better-than-expected at 109.9 from the previous 109.8 reading as the country's manufacturing continues to withstand the Eurozone debt crisis. With little significant US data out today, the market will likely focus on the upcoming G20 and IMF meetings as well as the French elections. On the technical end, short covering of the single currency against the dollar will likely keep the EUR strong in the near-term.

The GBP rallied against the greenback today, with the GBP/USD currency pair rising above the significant 1.61 level after UK retail sales posted positive figures. Retail sales excluding auto-fuel for March posted a 1.5% gain vs. the previous -0.8% and forecasted 0.4%, the fastest pace in more than a year. The yield on UK 10-year gilts climbed to the highest in two weeks amid speculation that the Bank of England will pause its stimulus program next month. With strong risk flows today, the GBP should remain supported until next week.

The JPY is weaker against nearly all of its major counterparts this morning as rising commodities encouraged investors to seek higher yields. The yen touched its weakest level since April 10 versus the USD on speculation Japan's central bank will add to monetary easing at its next meeting on April 27. Former Economic Minister today criticized the BOJ for protecting its own balance sheet as more important than ending deflation. To achieve an inflation goal of 1%, the BoJ Governor and officials are under pressure to loosen monetary policy in next week's meeting.

Commodity Currencies are hitting their highs against the USD as the Dow rebounds and the market seems to be taking a risk-on stance to close the week. Largely, it has been a disappointing week for the Aussie. Despite speculation the RBA could lower interest rates before the 3rd Qtr, the AUD and NZD has prevailed via the market's US dollar sell-off and PBoC talks of increasing liquidity. The CAD also strengthened to hit new highs vs. the USD, after a Bank of Canada statement on Tuesday was more hawkish than expected. Analysts anticipate the Loonie to outperform the commodity bloc as the currency's climb has been likely attributed by stronger economic data.

04/20/2012

CURRENT

CHANGE FROM CLOSE

EUR/USD

1.3215

0.59%

USD/JPY

81.58

0.02%

GBP/USD

1.6128

0.47%

USD/CAD

0.9912

0.44%

USD/MXN

13.1192

0.58%

USD/CHF

0.9093

0.64%

AUD/USD

1.0372

0.40%

NZD/USD

0.8169

0.40%

USD/ZAR

7.8027

0.61%

USD/SEK

6.6923

0.55%

USD/CNY

6.3085

-0.08%

10-Year Treasury Yield:

1.9800

0.53%

Gold:  

1641.80

$ -1.06

Copper:  

374.35

$ 3.41

Crude Oil: 

103.81

$ 1.54

DJIA:

13065.18

101.15

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This market summary is prepared by Union Bank's Global FX Department for the general information of its customers. It is based on the most accurate information currently available, but should not be considered investment advice or a guarantee of future exchange rates or trends.