The dollar was mixed against the major currencies in a quiet session to start the week, edging up toward the 1.35-level versus the euro while sliding to 1.0013 against the Canadian dollar. With the major European and Asian markets closed for holiday, thin liquidity pushed the Loonie closer toward the key parity mark, its highest level since July 2008. The Nasdaq was trading higher by more than 1% by the afternoon session while the Dow Jones advanced by over 0.5%. Crude oil continued to extend gains, climbing to its highest level in 17-months over the $86-level to $86.24.
The economic reports released this morning included pending home sales for February and non-manufacturing ISM in March. Pending home sales improved unexpectedly, climbing by 8.2% in February to 97.7 versus calls for a 0.5% decline from a downwardly revised 7.8%. Meanwhile, the non-manufacturing ISM survey edged out consensus estimates in March, rising to 55.4, compared with a 53.0 reading in February.
The key highlight for Tuesday will be the minutes of the March FOMC meeting, in which the board voted to leave policy unchanged - with KC Fed President Hoenig being the lone dissenter. Markets will look for clues as to when the Fed will further rein-in emergency liquidity measures - particularly raising the discount rate.
The Reserve Bank of Australia is slated to announce the results of its policy deliberations in early Tuesday. Recent data from Australia have maintained a buoyant tone, prompting recent commentary from RBA officials to lean toward a more hawkish tone. We anticipate a 25-basis point rate hike to 4.25% from 4.0%.
The Canadian dollar bounced to its highest level since July 2008 at 1.0008 against the greenback. Over the coming sessions, the Loonie will likely test the key parity level and remained buoyed heading into Friday's Canadian jobs data. Estimates are calling for further improvement in the outlook for the labor market, with 24k jobs added in March while the unemployment rate is expected to hold steady around 8.2%