EU Morning Report 

Euro edges higher on interest rate hike expectations

  • The US dollar rallied against its major counterparts on Friday following higher than expected Non Farm Payrolls data. The report surprised the market after it revealed 216 thousand new jobs were added in March. Also, the country's unemployment rate dropped from 8.9% to 8.8%. Later the dollar surrendered its gains weighed by comments from New York Fed Dudley. He said that the stronger jobs data is not enough in order to begin normalizing the monetary policy and that more healing is needed. Focus now turns to Fed Chairman Ben Bernanke speech due later today.
  • The euro edged higher against the dollar as world equities turn positive and risk appetite begins to heal. Interest rate expectations continue to support the single currency. Consumer Price Index revealed a 2.6% gain in March adding more on the view that the European Central Bank will raise the interest rates in April. Against the greenback, the euro fell to 1.4061 after the NFP report but quickly recovered to trade above the 1.42 level at 1.4244. The single currency also rose against the Japanese yen climbing to an eleven month high at 119.86 from 118.20.
  • Against the Japanese Yen, the dollar rallied on Friday rising above the 84 level and hitting 84.72 after the US jobs data. Later the pair surrendered some of its gains to trade at 83.96.
  • The Australian dollar rallied against the dollar supported by heightened risk appetite and rising commodity prices. The Aussie jumped to a fresh high rising as high as 1.0420 from 1.0318. Sterling advanced against the dollar jumping to 1.6171 from 1.5971. The Kiwi also rose versus the dollar hitting 0.7698 up from 0.7580 traded on Friday.
  • Oil prices remained elevated supported by the Libya unrest jumping to 108.50 dollars a barrel. Gold rose to 1430.80 dollars an ounce from 1412.52.

Currency to watch out for: GBPUSD & USDJPY  

  • § The GBPUSD pivot point is at 1.6100 with a preference to enter Long positions at 1.6110
  • § The USDJPY pivot point is at 84.70 with a preference to enter Short positions at 84.65              

Today's calendar and market movers:

  • § UK PMI Construction in March is forecasted to fall to 54.8
  • § Europe Producer Price Index in February is forecasted to gain 0.8%

Equity Markets:

US equities were positive on Friday with the S&P500 trading up 0.50% and the DJIA trading up 0.45%. The European bourses are also positive with the FTSE trading up 1.71%, the DAX up 1.97% and the CAC up 1.64%. The NIKKEI and the HSI at the time of writing are trading up 0.34% and 1.09% respectively.

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