Although the single currency extended Monday's gain in Asia and climbed to 1.3538 at European opening. The pair retreated as renewed selling interest quickly emerged there on wider eurozone fiscal concerns. Euro remained under pressure in Europe after early comments fm European Central Bank Governing Council member Jozef Makuch said involvement of the International Monetary Fund in helping out Greece is not on the agenda at the momentand price fell to an intra-day low of 1.3395 in NY morning after the release of U.S. consumer confidence which rose to 52.5 in March (forecast was 52.0) fm upwardly revised 46.4 in February. This is the first time the pair has fallen in three days and news that Greece’s seven-year notes fell in the initial day of trading as Prime Minister George Papandreou’s government struggled to fund itself was one of the factor for the weakness.
The British pound traded narrowly below Monday's high of 1.5019 in Asian morning. However, the pair rallied in Europe after the Office for National Statistics said the economy grew 0.4% exceeding previous estimate of 0.3% in the last three months of 2009. Cable later climed to a high of 1.5128 in NY morning, this is the strongest one-day rise in sterling in nearly two weeks.
Versus the yen, despite a brief dip to 92.12 in Asia, the dollar rebounded strongly from there. Price eventually rose above last week's high of 92.96 to 93.02 in NY morning on active cross-selling in yen and strong U.S. consumer confidence data. This is the first time since early January that the pair has rose above the 93.00 level.
In the commodity currencies, the greenback continued to weaken against the Canadian dollar on Tuesday. The pair hit an intra-day low of 1.0157 in NY morning after Canada reported that raw material prices unexpectedly rose in February to 0.4% versus -1.0% forecast. However, the loonie rebounded from there to 1.0216 after U.S. consumer confidence came in at 52.5 versus 50.0 forecast. The Australian dollar traded with a firm undertone and hit an intra-day high of 0.9218 in NY morning on expectation of another interest rate hike, however, the pair retreated in NY afternoon on profit taking and better-than-expected US consumer confidence.
Economic data to be released on Wednesday include: Japan manufacturing PMI, construction order, housing starts, U.K. gfk survey, Germany unemployment rate, E.U. HICP flash, unemployment, Swiss KOF indicator, U.S. ADP employment, Chicago PMI, durable goods, factory orders and Canada GDP.