The dollar was stronger on the 89 handle, trading between 89.443 - 89.960 and markets were more positive with Trump toning down the ante over Syria when he tweeted ”Never said when an attack on Syria would take place. Could be very soon or not so soon at all!”
Also, Trump has requested his advisors to investigate the US rejoining the Trans-Pacific Partnership after visits from senators and others explaining the impact of China’s retaliatory tariffs on the agricultural sector. The US 10yr treasury yield climbed from 2.77% to 2.84% while the Fed fund futures yields rose as much as 4 basis points.
EUR/USD recovered some ground back onto the 1.23 handle from the sharp drop in the European session on the weak EZ IP data and ECB minutes. The pair had dropped to 1.2299 but opened in NY at 1.2340.
GBP/USD recovered from the European low of 1.4145 despite a stronger dollar and ended the NY session at 1.4230 within the session's range of between 1.4246-1.4185. The pound elicited support earlier this week on the downside in the Ruble and with allies rallying behind the PM's marshalling. The cross was weighed by the poor data in the EZ and by the ECB minutes that were taken as dovish, (concerns over the strength of the euro and trade war risks), ending the NY session at 0.8663 within the shift's range of between 0.8698-0.8643.
USD/JPY rallied from 106.80 to a high of 107.42 as the Syria angst dies down and while Trump seeks an alternative strategy with respect to trade ties with China. The pair was testing the region of 107.50 and a hard resistance, (April high and 50% Fibo at 107.52).
As for the Aussie started out the US session at 0.7760 and remained robust despite dollar strength, ranging between 20 pips while supported gains in the yen cross. AUD/USD then tracked the dollar once again and was weighed down by risk turning sour taking the pair down to 0.7755 for the NY close.
Key notes:
- Wall Street stocks supported: no airstrike on Syria while earning season approaching
- White House on Syria: "no final decision has been made"
Key events ahead:
Analysts at Westpac offered their outlook for the day's key events as follows:
"The RBA’s semi-annual Financial Stability Review is due at 11:30amSyd/9:30am Sing/HK. There should be some interest in commentary on the rise in short-term AUD/USD wholesale interest rates and as always in the housing market, but markets typically don’t respond to the release."
"Singapore releases both the advance estimates of Q1 GDP and the Monetary Authority of Singapore’s semi-annual policy review at 10am Syd/8am local. Consensus is for a lively 4.3%yr on GDP but SGD could focus more on the MAS decision. At the previous review, in October, the MAS maintained a 0% appreciation for the trade-weighted SGD. Westpac looks for a return to the historically normal appreciation of the SGD band."
"At 12pm Syd/10am local we should see China March trade data. Lunar new year timing seems to have distorted Jan and Feb data so this update on export and import growth should be a more indicative of underlying trends."
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