Once again the USD has been at the heart of what has been a volatile session in FX markets, with the greenback falling below last week’s FOMC statement low of 96.63. The early softness in the USD comes in the wake of the recent cautious comments from a slew of Fed speakers who have continued to echo the post-FOMC rhetoric that they are not in a rush to hike rates. Furthermore, US CPI (Feb) M/M 0.2% vs. Exp. 0.2% was in-fitting with Exp. however the stronger core component lifted the USD-index to gradually pare all of its earlier losses in the latter half of the European session. The USD was also bolstered by New Home Sales (Feb) M/M 539k vs. Exp. 464k which surged to its highest level since February 2008 alongside US Manufacturing PMI which came in above Exp. The EUR had been broadly stronger with EUR/GBP printed fresh 1 month highs and lifted EUR/USD above the 1.1000 handle, however the late resurgence of the USD saw the pair erase all of its earlier gains in a 140 pip swing. Elsewhere, GBP/USD underperformed the major pairs after UK CPI (Feb) Y/Y 0.0% vs. Exp. 0.1% showed inflation at its lowest level since the series began in 1989.
Overnight, AUD led the slide against the greenback, weighed on by the Chinese HSBC Manufacturing PMI (Mar P) M/M 49.2 vs. Exp. 50.5 which showed an 11 month low, prompting AUD/USD to pull off its 1-month highs, however, in the first half of the European session commodity linked currencies continued to gain against the greenback with AUD/USD printing fresh 1 month highs at 0.7939 before pulling off best levels heading into the European close. Elsewhere, the Hungarian Central bank cut rates by 15bps to 1.95%, where analysts had expected a cut of 20bps which saw EUR/HUF fall by 74 pips, however additional comments from the central bank suggested further ‘cautious easing’ could be on the cards in the near future which saw EUR/HUF reverse its earlier downside.
Looking ahead, this evening sees the release of the US API crude inventories, while tomorrows’ data slate provides the German IFO Business Climate, US Durable Goods and DoE crude inventories which are expected to show a build of 4.75mln.
Overnight, AUD led the slide against the greenback, weighed on by the Chinese HSBC Manufacturing PMI (Mar P) M/M 49.2 vs. Exp. 50.5 which showed an 11 month low, prompting AUD/USD to pull off its 1-month highs, however, in the first half of the European session commodity linked currencies continued to gain against the greenback with AUD/USD printing fresh 1 month highs at 0.7939 before pulling off best levels heading into the European close. Elsewhere, the Hungarian Central bank cut rates by 15bps to 1.95%, where analysts had expected a cut of 20bps which saw EUR/HUF fall by 74 pips, however additional comments from the central bank suggested further ‘cautious easing’ could be on the cards in the near future which saw EUR/HUF reverse its earlier downside.
Looking ahead, this evening sees the release of the US API crude inventories, while tomorrows’ data slate provides the German IFO Business Climate, US Durable Goods and DoE crude inventories which are expected to show a build of 4.75mln.
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