Currency Updates:
U.S. Dollar Trading (USD) the USD was under pressure overnight as risk appetite picked up after stronger than expected manufacturing surveys out of China and the US. US ISM Manufacturing rose to 53.4 vs. 52.4 previously. US construction data was weaker than expected falling -1.1% vs. 0.6% forecast. Looking ahead, FOMC Minutes from the March Meeting.
The Euro (EUR) the Eurozone showed the two speed nature of the global recovery with March PMI fell to 47.7 vs. 47.6 previously. The Debt crisis has forced European governments to pass Austerity budgets and this has led to a severe contraction of economic activity and a likely recession.
The Japanese Yen (JPY) the USD/JPY was the strongest hit by the USD reversal falling down to Y82 as crosses as well reversed in a rare day on Yen strength even as stocks rallied. The outlook is mixed with the FOMC minutes tonight critical for the US monetary policy. Traders do not fully believe the BOJ claims to keep doing extraordinary new measures to support the economy going forward.
The Sterling (GBP) the GBP/USD broke above 1.6000 once again and this time closed above the key level with the UK manufacturing survey avoiding the Eurozone slowdown to print a 52.1 vs. 51.6 previously. Looking ahead, February PPI forecast at 0.5% vs. 0.7% m/m. March Construction PMI forecast at 53.5 vs. 54.3 previously.
Australian Dollar (AUD) the AUD/USD opened up very strong after the Chinese PMI was stronger than expected but from the Open we saw steady selling and by mid Europe we had moved down to 1.0365. The US stock market rally allowed a rally back above 1.0400 but the market is fragile. UPDATE the RBA holds at 4.25%.
Oil & Gold (XAU) Gold pushed up to its next level near $1684 with the $1700 now looming as significant resistance. Oil Rallied with the rest of the market pushing higher on USD weakness and expectations that global manufacturing was rebounding.
