The US dollar was forced to return its wins before the end of the trading session when risk appetite picked up. Data from the US was mixed, as the Philly Fed index improved from -5.9 to -3.5 while initial jobless claims showed a larger than expected rise of 293K versus the projected 279K figure. Only the US flash manufacturing PMI and existing home sales are up for release today and both reports are slated to show improvements.
The euro suffered a sharp selloff during the press conference after the ECB statement, as Governor Draghi emphasized that they’re willing to act if necessary. He admitted that the economy condition has worsened since December and that they don’t have a shortage of monetary policy easing measures to use in March. Still, the shared currency regained ground when risk-on flows emerged at the end of the day. Euro zone PMI readings and another testimony by Draghi are lined up today.
The pound also gave up ground then quickly reversed its drop, as the currency took its cue from market sentiment. There have been no major reports out of the UK yesterday while today has the retail sales and public sector net borrowing report on tap. A 0.1% decline in consumer spending is eyed while the public deficit might narrow to 10.1 billion GBP from 13.6 billion GBP.
The franc initially gave up ground to the dollar but recouped its losses later on, even though there were no major releases from the Swiss economy. There are still no reports due from Switzerland today, although the euro zone PMIs might serve as catalysts for franc price action.
The yen was unable to hold on to its recent wins when risk appetite returned to the markets. Japan’s all industries activity index showed a 1.0% decline, worse than the projected 0.7% drop, and their flash manufacturing PMI is due today. An improvement from 52.6 to 52.8 is eyed.
Commodity Currencies (AUD, NZD, CAD)
The comdolls were able to rake in a lot of gains when risk-on flows emerged and oil prices rebounded. Crude oil inventories rose by 4 million barrels versus the projected 3.3 million gain, but WTI crude oil managed to bounce to the $30/barrel level. Canada’s CPI and retail sales reports are up for release today, with a 0.4% drop in the headline CPI expected.