EU session review: Dollar rises for third day

Data released:

07:15 GMT Switzerland Producer and Import Prices (MoM) (Mar) 0.0% 0.0% -0.4% 

07:15 GMT Switzerland Producer and Import Prices (YoY) (Mar) -0.7% -0.8% -0.8%

08:30 GMT UK Consumer Price Index (YoY) (Mar) 1.6% 1.6% 1.7% 

08:30 GMT UK Consumer Price Index (MoM) (Mar) 0.2% 0.2% 0.5% 

08:30 GMT UK Core Consumer Price Index (YoY) (Mar) 1.6% _ 1.7% 

08:30 GMT UK DCLG House Price Index (YoY) (Mar) 9.1% 7.2% 6.8% 

08:30 GMT UK PPI Core Output (YoY) n.s.a (Mar) 1.0% 0.9% 1.1% 

09:00 GMT EMU Trade Balance s.a. (Jan) €13.9B _ €14.7B 

09:00 GMT EMU Trade Balance n.s.a. (Feb) €13.6B €8.5B €0.8B 

09:00 GMT EMU ZEW Survey - Economic Sentiment (Apr) 43.2 45.0 46.6 

09:00 GMT EMU ZEW Survey - Current Situation (Apr) 59.5 51.8 51.3 

The dollar strengthened for a third day against the euro before a U.S. report that economists said will show a gauge of manufacturing in the New York region increased in April.

America’s currency rose as Federal Reserve Chair Janet Yellen prepares to speak at a conference today amid signs the economic recovery is gaining momentum. 

The dollar gained yesterday as retail sales rose more in March than economists forecast. 

“This week’s focus is on U.S. data, which should support a rebound in the dollar,” said Michael Sneyd, a currency strategist at BNP Paribas SA in London. “There’s still a bit of excitement following yesterday’s retail sales numbers. It’s likely to be quite an important week.”

EURO

The pair remains unable to gather any traction despite the Economic Sentiment in the euro area surpassed estimates for the month of April. Current Situation in Germany followed suit, advancing to 59.5 while Economic Sentiment in the first economy of the bloc disappointed investors at 43.2 vs. 45.0 expected. 

Further data showed a wider trade surplus in the euro region in February, reaching €13.9 billion. “Today’s ZEW index sends two messages, which perfectly characterise the current state of the German economy. The economy had an excellent start to the new year, gaining new momentum. However, with the Ukraine crisis, Chinese uncertainties and emerging markets slowing down more and more weight on the economy”, Carsten Brzeski, Analyst at ING Bank NV., said.

EUR/USD tries to be back to $1.3800 following mixed data from the ZEW Survey.

Below minor support comes at $1.3740 (Apr 8 lows), extending to $1.3670 (Apr 4 lows). Breack above $1.3900 will target $1.3965 (Mar 13 highs).

POUND

The pound reacted positively to inflation data, which showed UK CPI fell to a 4 1/2 year low of 1.6% YoY in March, meeting market's consensus, down from 1.7% in February.

GBP/USD after dipping down to session lows at $1.6660 (initial support) the GBP/USD recovered to $1.6730 and currently holds a bit lower. Above $1.6820 resistance comes at $1.6880 (Nov 15’2009 high). Initial support is around $1.6720 (38.2%). Below $1.6660 losses may widen to $1.6620 and $1.6550 (Apr 4 lows). 

YEN

The yen rose versus the dollar after information that Abe did not make requests of BOJ's Kuroda on easing. But japanese currency stays in last days’ range. 

USD/JPY trades below Y102.00. Initial support comes at Y101.30 (Apr 10 lows). Below support comes at Y100.70 (Feb 7 lows). Closest resistance comes at Y103.40 and around Y104.00. Stronger one remains at Y104.30/80.

DATA AHEAD

US inflation data come at 12:30 GMT, followed by Apr NY Empire State Manufacturing Index.

Fed's Yellen speaks at 12:45 GMT.

At 13:00 GMT US Feb Total Net TIC Flows come.

Later, at 14:00 GMT, Apr NAHB may report Housing Market Index rose to 49 after 47 in Mar.

At 21:45 GMT New Zealand bring Q1 Consumer Price Index.

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