The Japanese yen is almost unchanged on Thursday. In the North American session, USD/JPY is trading at 154.44, up 0.03%. It’s a light data calendar today. US unemployment claims were unchanged at 212,000 and the Philly Fed Manufacturing index surged to 15.5 in April, up from 3.5 in March and crushing the market estimate of 1.5. Early on Friday, Japan releases CPI for March, which is expected to tick higher to 2.8%, up from 2.7% in February. It was just over a week ago that I posed the question of whether the 152 level was a line in the sand which would trigger intervention from Tokyo. The yen ..read more

The British pound is having a quiet week and that trend has continued on Thursday . In the North American session, GBP/USD is trading at 1.2450, down 0.04%. Will UK retail sales improve? The UK release retail sales for March on Friday. The market forecast for March is 0.7% y/y after a decline of 0.4% y/y in February. Today’s British Retail Consortium retail sales index jumped 3.5% y/y in March, raising hopes that the official retail sales release will also improve. The driver behind the strong gain was spending on food, as the Easter holidays fell in late March. Retail sales have shown sharp ..read more

The Australian dollar is steady on Thursday. In the European session, AUD/USD is trading at 0.6442, up 0.12%. Australia’s employment declines Australia’s job growth hit the breaks in March and fell by 6,600. This missed the market estimate of a gain of 7,700 and follows a blowout gain of 116,500 in February. Still, the drop was not all that concerning as full time employment increased by 27,900 (part-time roles fell by 34,500). The unemployment rate ticked higher to 3.8%, up from 3.7% in March. Although the job numbers were not flattering, the labor market remains tight. An unemployment level ..read more

The Australian dollar has stabilized on Wednesday, after a 2.2% decline over the past three days. In the North American session, AUD/USD is trading at 0.62254, up 0.37% but remains close to five-month lows. Australian job growth expected to slide Australia’s employment is expected to post a small gain of 7,200 in March after a blowout gain of 116,500 in February. The unemployment rate is expected to bump up to 3.9% after falling from 4.1% to 3.7% in February. The stunning February jobs report made the Reserve Bank of Australia look good, as it paused rates (rather than cut) just two days earl ..read more

The New Zealand dollar has bounced back with strong gains on Wednesday, ending a nasty slide of 3.4% which started last week. In the North American session, NZD/USD is trading at 0.5907, up 0.45%. New Zealand inflation falls less than expected New Zealand’s CPI continued to ease in the first quarter but the markets were expecting more. CPI fell to 0.6% q/q, in line with expectations but shy of the 0.5% market estimate. The main drivers behind the inflation reading were increases in housing and household utility costs. On an annualized basis, CPI dropped to 4%, below the market estimate of 4.3 ..read more

The British pound has rebounded after sliding 2.1% over the past week. In the European session, GBP/USD is trading at 1.2461, up 0.28%. UK inflation drops to 3.2% Inflation in the UK continues to decline but the March release was not as strong as expected. Inflation eased to 3.2% y/y, down from 3.4% in February but higher than the market estimate of 3.1%. The inflation rate fell to its lowest since September 2021 as inflation eased for food, restaurant and hotels. Monthly, inflation was unchanged at 0.6%, above the forecast of 0.5%. It was a similar story for the core rate, which dropped from ..read more

A bolder dovish ECB increases the likelihood of a yield premium shrinkage of Eurozone sovereign bonds over Switzerland sovereign bonds. The recent 2-month of rallies seen in the EUR/CHF have been overstretched with bearish momentum conditions flashed out. EUR/CHF is at risk of shaping a short-term mean reversion decline within a medium-term uptrend phase. Watch the 0.9755 key short-term pivotal resistance on the EUR/CHF. The recent two months of Euro strength against the CHF has led to a stellar gain of +540 pips (+5.8%) in the EUR/CHF cross pair from a low of 0.9306 on 31 January 2024 to a ..read more

The New Zealand dollar is down for a third straight day and has plunged 3.4% in less than a week. In the North American session, NZD/USD is trading at 0.5881, down 0.36%. New Zealand inflation expected to fall to 4.3% New Zealand’s inflation rate has been dropping and the trend is expected to continue on Wednesday. CPI for the first quarter is expected to drop to 4.3% y/y, compared to 4.7% in Q4 of 2023. On a quarterly basis, CPI is projected to rise to 0.6%, up a notch from 0.5% in the fourth quarter. The Reserve Bank of New Zealand kept the cash rate unchanged at 5.5% for a sixth straight t ..read more

The odds have inched higher for a currency war scenario where the Chinese yuan may be weakened further to drive export growth due to its latest decelerating growth trend in China’s retail sales and persistent weak housing prices. Export-oriented countries may be forced to enact “beggar-thy-neighbour” typed monetary policies to deliberately weaken their respective currencies. A heightened currency war-liked scenario is likely to trigger another layer of US dollar strength. A persistent US dollar strength may not bode well for global stock markets in the medium term. China’s domestic economy ..read more

The Canadian dollar is down for a fifth straight day and has slipped 1.9% during that time. In the North American session, USD/CAD is trading at 1.3840, up 0.37%. Canada’s inflation rises to 2.9% Canada’s inflation rate for March rose to 2.9% y/y, ticking up from 2.8% in February and above the market forecast of 2.7%. A sharp rise in gasoline prices and shelter costs were the drivers behind the slight acceleration. At the same time, two key core rates eased lower. The trimmed mean dropped from 3.2% to 3.1%, below the market estimate of 3.2%, and median CPI dropped from 3% to 2.8%, shy of the ..read more