Dollar Slides Ahead of U.S Data Release
The US dollar was lower against its major trading partners early Tuesday, apart from the euro, ahead of the release of consumer confidence data for March and weekly Redbook retail sales data.
January home prices, the JOLTS report for February, and the Dallas Federal Reserve’s services reading for March will also be released Tuesday. The highlight of the week will be Friday’s employment report for March, which is expected to show slower payrolls growth after a 678,000 jobs surge in February, but a dip in the unemployment rate.
Other data releases this week include consumer confidence for the final estimate of Q4 GDP on Wednesday, personal income and spending data for February on Thursday, and the purchasing manager index (PMI) and ISM manufacturing readings for March on Friday.
Multiple Fed speakers last week, including Chair Jerome Powell, suggested that one or more 50-basis point fed funds rate increases are on the table for some time this year, the first one possible at the May 3-4 meeting of the Federal Open Market Committee.
New York Fed President John Williams speaks today, followed by a speech by Philadelphia Fed President Patrick Harker at 10:45 am ET. A quick summary of foreign exchange activity heading into Tuesday shows EUR-USD rose to 1.1049 from 1.0986 at the Monday US close and from 1.0987 at the same point a day earlier.
German consumer sentiment is expected to decline further in April, while French consumer confidence fell in March. EU consumer confidence will be released on Wednesday. READ: Naira Falls as Dollar Volume Traded at Investors Window Slides
Given the situation in Ukraine, European Central Bank officials have expressed caution regarding the pace of its tightening cycle. ECB member Elizabeth McCaul speaks Tuesday morning.
GBP-USD slipped to 1.3089 from 1.3094 at the Monday US close and 1.3148 a day earlier. There are no UK data scheduled for release on Tuesday. UK GDP will be released Thursday, followed by manufacturing PMI on Friday.
The Bank of England is expected to raise interest rates further at its May meeting, though BOE Governor Andrew Bailey acknowledged Monday that risks remain in both directions, particularly from inflation.
USD-JPY fell to 123.5737 from 123.917 at the Monday US close and 124.0813 a day earlier but remained elevated. The Japanese unemployment rate declined in February, according to data released overnight, but the drop was due to fewer seeking work as employment was unchanged in the month.
The Bank of Japan has attempted to defend its ultra-low interest rate cap by buying bonds, the opposite of other central banks that have begun monetary policy tightening. USD-CAD slipped to 1.2484 from 1.2518 at the Monday US close but was virtually unchanged from the 1.2486 level a day earlier.
There are no Canadian data scheduled for release on Tuesday, leaving markets to look ahead to Canadian GDP on Thursday and manufacturing PMI on Friday. The Bank of Canada is expected to tighten further at its next policy announcement on April 13, possibly by 50-basis points.
#Dollar Slides Ahead of U.S Data Release
