The greenback weakened against most of its major counterparts except the Japanese yen on Monday as stronger-than-expected U.S. data added to evidence a recovery in U.S, the world’s largest economy, is gaining traction, boosting demand for currencies linked to growth.
Versus the yen, the buck retreated from a seven-month high as investors booked profits following four days of gains. Despite brief rise to 94.78 in Australia, the pair retreated from there and remained soft for the rest of the day. Price fell to an intra-day low of 94.08 in NY afternoon after release of stronger-than-expected U.S. services and housing activity. The ISM index of non-manufacturing businesses, which make up almost 90 percent of the U.S. economy, increased to 55.4 for March, exceeding the median forecast of 68 economists surveyed.
The single currency was choppy on Monday as European markets closed for Easter Monday. Despite rebounding to 1.3528 in NY morning after falling to intra-day low of 1.3461, euro retreated to 1.3472 on broad-based dollar strength after the release of encouraging U.S. data.
The Canadian dollar extended its recent rally against the buck on Monday and moved closer to parity. The USD/CAD pair tumbled to its weakest level since July 2008, 1.0010 (10 pips above 1.0000), in NY mid-day on expectation of a BOC hike.
Ecnomic data to be released on Tuesday include : Australia RBA Interest Rate Decision, Swiss CPI, U.K. PMI construction, U.S FOMC minutes.