The dollar was slightly firmer against the majors in the Wednesday session, pushing the euro off its session highs just shy of the 1.33-level toward the 1.32-handle and recovering above the 1.50-level versus the sterling. US equities were largely flat on the day with traders eyeing key earnings reports scheduled for the remainder of the week including JP Morgan, Citigroup and GE. The major driver of FX market moves continues to be global equity direction, with safe haven flows benefiting the dollar and yen.
Economic data released earlier from the US included March CPI, NY Fed manufacturing, industrial output, capacity utilization, net capital flows and the NAHB housing market index. The March CPI declined by 0.1% versus an increase of 0.4% in the previous month, while the annualized CPI figure fell by 0.4% compared with +0.2% a year earlier. The core CPI figures increased by 0.2% on a monthly basis while the remaining unchanged at 1.8% on a yearly basis. The NY Fed manufacturing survey for April improved to -14.65 from a month earlier at -38.23. Industrial output was unchanged in March, falling by 1.5%, while capacity utilization eased to 69.3% from 70.2%. Lastly, the NAHB housing market index unexpectedly improved to 14 in April, beating expectations for an increase to 10 from 9 in March.
The calendar for Thursday consists of weekly jobless claims, March housing starts, housing permits and Philadelphia Fed survey. Weekly jobless are seen creeping up to 655k from 654k. Housing starts in March are expected to decline to 550k units, down from 583k units, while housing permits are seen easing to 550k from 564k a month earlier. Lastly, the April Philadelphia Fed business survey is estimated to improve to minus 32 from minus 35 in March.
EURUSD hovers just above the 1.32-level with support starting at 1.3180 backed by 1.3130 and 1.31. Additional support will emerge 1.3050, backed by 1.3020 and 1.30. Meanwhile, gains will target resistance at 1.3225, followed by 1.3260 and 1.33. Subsequent ceilings are seen at 1.3340, followed by 1.3370 and 1.34.