The dollar continued to rebound versus the yen, edging up to 100.84, in a holiday-thinned Monday session â€“ with Europe and Asia still closed for the Easter holiday. Economic data released earlier today also provided support for the greenback, with existing home sales in February reversing Januaryâ€™s 0.4% decline, rising by 3.9% to 5.03 million units.
Further, the revised offer by JP Morgan to acquire Bear Stearns at $10 per share, quadruple its initial offer, sent US equity bourses rallying with the Nasdaq advancing by more than 3%, and both the Dow Jones and S&P 500 up by over 1.5%.
The US economic calendar this week consist of the Richmond Fed survey, March consumer confidence, building permits, durable goods orders, new home sales, final Q4 GDP, core PCE, personal consumption, personal income, and the University of Michigan consumer sentiment. The final reading for Q4 GDP is seen unrevised at 0.6% on a quarterly basis and unchanged at 2.6% y/y.
We expect the dollar to continue edging higher against the majors in the week ahead, with initial targets of 1.52 versus the euro and 1.96 against the British pound. The correction in commodities is also seen extending, thereby pressuring the commodity currencies such as the Aussie and Canadian dollar lower.