For the third time in four days the dollar tested upside resistance on the Dollar Index charts, and closed out the session higher against the European and Japanese pairs but lower against the commodity backed aussie and cad. “We have a situation that is unusual in regard to dollar direction; the trade balance and employment numbers were better than expected and that enabled the Usd to get bought, but that also rallied the oil markets at the same time as Treasuries were going up” said Trade Team members.
“The market created a push-me pull-you situation that had the dollar moving different ways, and sets up a potentially explosive week of trade after the Easter break” they said. “The forex markets were dollar dominated on Thursday, and the euro, cable, Swiss franc and Japanese yen took big hits”.
“The swissy moved on the Treasury yield story, the yen moved as equities went up, cable and euro lost ground as thoughts came to traders’ minds that the U.S. economy may beat the U.K. and Euro-zone into expansion” they said.

”The biggest hit was delivered to the euro, in an unusual reaction to stocks and oil moving higher, but the growing concerns that the European economy may have another rate cut imposed on it over the next two months, that will further depreciate the euro, over-rode the fundamental equity/oil story”.
The pound lost ground on the day that the Bank of England held rates, as expected, but was allowed some late relief in-line with cable getting bought as equities moved higher. “The initial drops were too much to regain all of, but we saw pound buyers as the day wore on, more than can be said for the euro bulls” the Trade Team said.