EU Morning Report
Dollar remains under pressure after disappointing jobs data
- The US dollar plummeted to a three year low against a basket of currencies weighed by surprisingly poor Jobless data. Initial Jobless Claims rose to 429K while the market was expecting a fall to 392K. Gross Domestic Product showed a 1.8% expansion in the first quarter, which is a significantly lower figure comparing to the previous quarter's 3.1% growth. The dollar remains under pressure after the FOMC meeting revealed the Fed will resume its easing monetary policy, raising expectations that interest rates will remain near zero levels for an extended period of time. Against the Japanese yen, the dollar slid as low as 81.39 from 82.24.
- The euro continues to trade above the 1.48 level against the dollar. Speculation that interest rates in the US will remain near zero levels raised demand for higher yielding assets. With Japan and the UK on holiday today, the euro was little changed during the Asian session rising to 1.4848 against the dollar from 1.4803. Focus now turns to inflation figures from Europe expected at 9:00 GMT.
- The Australian dollar rallied to a fresh all-time high versus the dollar on Thursday supported by expectations for an interest rate hike following the first quarter's surprisingly strong Consumer Price Index. Further supported by surging commodity prices, the Aussie jumped to 1.0947 versus the dollar yesterday and the pair was last trading at 1.0904. Aussie's neighbor, the Kiwi, fell on Thursday weighed by comments from Reserve Bank Governor Allan Bollard saying that interest rates will remain low until the country fully recovers from the massive earthquake that hit Christchurch. The New Zealand dollar fell to 0.7969 dollars from 0.8081.
- Oil prices ticked higher at 113.94 dollars a barrel from 111.67. Gold rose to a fresh record high at 1538.30 dollars an ounce from 1524.38. Silver also rose to 49.50 dollars an ounce from 47.23.
Currency to watch out for: EURUSD & USDJPY
- § The EURUSD pivot point is at 1.4770 with a preference to enter Long positions at 1.4770
- § The USDJPY pivot point is at 82.00 with a preference to enter Short positions at 82.00
Today's calendar and market movers:
- § US Consumer Sentiment Index in April is forecasted to rise to 69.9
- § Europe Consumer Price Index in April is forecasted to gain 2.7%
- § Canada Gross Domestic Product is forecasted to remain unchanged
- § Switzerland KOF Leading Indicator in April is forecasted to fall to 2.20
US equities were positive on Thursday with the S&P500 trading up 0.36% and the DJIA trading up 0.57%. The European bourses were also positive with the FTSE trading up 0.03%, the DAX up 0.95% and the CAC up 0.91%. The NIKKEI and the HSI at the time of writing are trading up 1.63% and down -0.52% respectively.
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