• USD: Lower, housing starts, building permits and import prices decline, stocks and commodity prices rally
      • JPY: Lower, BOJ ease speculation, report Japan may tap FX reserves to support government spending
      • EUR: Higher, EU ministers agree on the Greek aid plan, German economic sentiment beat forecast
      • GBP: Higher, house prices rise, election polls suggest Conservatives will win a small majority in parliament
      • CAD and AUD: AUD & CAD higher, RBA rate hikes to be gradual, strong Canadian mfg. shipments

      Overview

      The USD started out higher in overseas trade supported by report that over 100 US members of Congress want China to be named as a currency manipulator. The USD traded lower in the US trading session pressured by report that the EU ministers have a plan to aid Greece if needed and in reaction to report of better than expected German economic sentiment and UK election polls which suggest the Conservatives will win a  small parliamentary majority. Commodity currencies edged higher supported by firmer equity market trade and a rally in commodity prices. AUD gains were partly limited by the release of March RBA policy minutes which read a bit dovish. CAD was supported by a statement from Canada's Finance Minister Flaherty that the CAD was competitive at parity with the USD and in reaction to report of strong Canadian manufacturing shipments and productivity. JPY traded lower pressured by BOJ ease speculation and a Nikkei report which says that the Japanese government may tap FX reserves to boost spending plans. Japan's Finance Minister Kan denied the Nikkei report Nikkei report but JPY remains on the defensive. US economic data was mixed with housing starts and building permits coming in lower but close to expectations. Import prices dropped by less than expected. The trade awaits today's FOMC policy statement. The FOMC is expected to reaffirm its commitment to low yields for an extended period. Investors will be monitoring whether there is any change in the FOMC policy language and the Feds assessment of the strength of the US recovery.

      Today’s US data:

      February housing starts declined by 5.9% to 575k, a reading of 580k was expected.  February building permits declined by 1.6% to 612k, a reading of 610k was expected. Q4 import prices declined by 0.3%, a reading of -0.4% was expected.

      Upcoming US data:

      On March 17th February PPI will be released expected at -0.2% compared to 1.4% last month. On March 18th February CPI will be released expected at 0.1% compared to 0.2% last month. Q4 current account, initial jobless claims for week ending 03/13, leading indicators for February and March Philly Fed will also be released on March 18th. The current account is expected at -120bln compared to -108bln last quarter. Initial claims are
      expected at 457k compared to 462k last week. Leading indicators are expected to rise by 0.2% compared to 0.3% last month. Philly Fed is expected at 18 compared to 17.6 last month.