The USD bounced back in the NY afternoon from earlier losses as US stocks failed to sustain gains, breaking a string of positive equity market performances over the prior 4 sessions. European stocks managed to close up around 3%, but US indexes, which had been up over 2%, slumped in the least hour of trading to close down slightly on the day. The USD has continued to trade largely in reaction to global stock market moves: when shares are positive, the USD has tended to fall and the JPY-crosses have tended to rise alongside stocks, and vice versa. Today, early gains in EUR/USD to around 1.3070 were unwound in the NY afternoon, which EUR/USD drop back to the 1.2970 level. Cable, which had one of the largest moves higher in recent weeks, also surrendered gains, dropping back from a high of about 1.4230 to finish out near 1.4080. Gold prices also recovered from sharp early losses of as much as $15/16/oz, but still closed down about $5 on the day at $924.20.
Weak US data released on Monday morning was initially shrugged off in light of the global share rally, but eventually weighed on sentiment enough that gains could not be extended. The NY Fed's March Empire manufacturing index dropped to a new all time low of -38.23 vs. an expected improvement. Feb US Industrial production also fell more than expected, -1.4% MoM vs. exp. -1.3%, throwing another spanner in the works. Lastly, US NAHB housing market index for March held steady at 9, just one point above all-time lows, but prospective buyer traffic fell even more, suggesting no improvement is in sight yet for US housing.
Key releases ahead in Asia/Pacific trading are the Japanese Jan. Tertiary industry index and the minutes from the RBA recent meeting where they surprised markets by holding rates steady.
Upcoming data releases:
- 3/16/2009 23:50 JN Tertiary Industry Index (MoM) JAN -1.60% -0.50
- 3/17/2009 0:30 AU Reserve Bank Board's March Minutes 17-Mar
- 3/17/2009 6:00 JN Machine Tool Orders (YoY) FEB F -83.90% - -
