USD weakness was the main theme in the NY session as comments from various characters in support of expanding the IMF's Special Drawing Rights (SDRs) hit the currency. These included Treasury Secretary Geithner, IMF Chief Strauss-Khan, Fed's Janet Yellen and investor George Soros. The buck is about 42% of the SDR basket and as such any expansion of this reserve asset was viewed as dilutive for the greenback. Euro is also a nontrivial 36% of the basket, however, and thus the move in EUR/USD from 1.3480 to 1.3650 in one fell swoop was exaggerated to say the least. The pair closed up about 90 pips in NY trading towards the 1.3580/90 zone.
US equities managed to eke out a +1% gain on the day on the back of a massive +3% rally in the final hour of trading. US Treasuries were sold as the 5-year auction with a bid/cover just slightly above 2.0 was deemed a disappointment. The 10-year yield was up more than 8 basis points on the day to 2.78%. Gold surged about +$8 into the 933/934 zone and this was also fueled by the USD negative IMF commentary. The precious metal should continue to find a barrier by 950 and buying interest likely emerges near the 900/890 area as well.
The price action in the major yen crosses was also dictated by the buck. USD/JPY slipped a modest -10 pips to 97.50/60 while EUR/JPY soared 80 points to the 132.50/60 level. USD/CAD was little changed by 1.2320/30 after the weekly oil inventory report was mixed for crude prices. Oil stockpiles jumped a higher than expected 3.3 million but gasoline inventories slipped -1.1 million and this provided some offset.
Upcoming Economic Data Releases (Asia Session) prior expected
- 3/25 21:45 GMT NZ Current Account Balance 4Q -5.994B -4.000B
- 3/25 21:45 GMT NZ Account Deficit-GDP Ratio 4Q -8.60% 9.00%
- 3/25 22:10 GMT AU RBA Head of Economics Richards Gives Speech
- 3/25 23:00 GMT AU Conference Board Leading Index JAN -0.90% - -
- 3/25 23:50 GMT JN Corp Service Price (YoY) FEB -2.20% -2.50%
- 3/26 0:30 GMT AU Reserve Bank Releases Financial Stability Review
