Dollar has been bearish for a while as the Fed turns dovish as they continue to express disappointment in improvements in the labor market although they raised the growth estimates. Most of the currencies continue to remain stronger against the Dollar with the Swiss Franc and Yen remaining strong on demand for safety with the Franc climbing to a record and the Yen strengthening to a two-week high as continuing violence in Libya escalated oil prices to $100 and stocks declined. USDCHF fell to a low of 0.9274, USDJPY fell to a low of 81.98, EURUSD rose to the strongest in three-weeks to trade at a high of 1.3785 on speculations that the ECB will hike rates faster than the Fed, GBPUSD rose to a high of 1.6255 as the number of members voting for a rate hike increased, according to minutes released yesterday, AUDUSD rose to a high of 1.0083 as business investments rose 1.3% giving rise to speculatio n of a rate hike.
Oil climbed to $100 for the first time in two-years, dragging airline profits lower amid escalating conflict in Libya which sent the MSCI Asia Pacific benchmark index to its longest losing streak in three months. The index dropped 0.6%, Nikkei dropped 1.2%, Topix down 1.34%, Hang Seng down 0.2% while the Shanghai Composite was up 0.45%. There could be slowdown in recovery for stocks as GDP forecasts could be lowered on rising oil prices and Middle East conflict could spread fear among investors on a contagion spreading to other nations.
German inflation reports could show a hike of 0.5% (prev. -0.5%) and the ECB policy makers will take decisions to do the necessary to maintain price stability according to ECB President Trichet and will hold a policy meeting on March 3 with speculation of a hike seen in couple of months, boosting the Euro while BOE members are joining in for call for rate hikes which is boosting Pound prices against the Dollar with speculations of action taken soon, given the high inflation level and economic data showing signs of recovery. US New Home sales could show a drop in sales by 7.3% to 305,000 which could further weaken the Dollar, initial jobless claims figures would show a drop of 5,000 to 405,000 which could aid the overall payroll data due on March 4. German GDP figures remained unchanged at 4% YoY on strong export growth and public spending which could help bring back recovery in the EU but exter nal factors could still play a role in strengthening safety demand.
EU releases consumer, economic, industrial and service confidence figures, US releases durable goods orders, jobless claims figures, new home sales and Fed's Bullard, BOE's Weale and Sentance speak today.