Dollar fell yesterday after lower than expected US Consumer Confidence

The Dollar fell broadly on Tuesday, posting its steepest loss against the Euro in two weeks, sparking a rebound in commodity prices and helping to preserve investors' appetite for risk. News that US consumer confidence in March plunged to a five-year low, while expectations for the future dropped to their lowest level in 34 years also added to selling pressure on the Dollar. A separate report showed US home prices for January declined in 16 of the 20 regions measured. Concerns about the health of the US economy and the global financial sector, which were heightened by the downbeat Consumer Confidence and Housing report, pushed the Dollar weaker versus the low yielding Japanese yen and Swiss franc. The weak Dollar saw Gold and Oil prices rebound from last week's declines, supporting US equities and lifting commodity-based currencies such as Australian and New Zealand dollars.


News and Events:
The Dollar fell broadly on Tuesday, posting its steepest loss against the Euro in two weeks, sparking a rebound in commodity prices and helping to preserve investors' appetite for risk. News that US consumer confidence in March plunged to a five-year low, while expectations for the future dropped to their lowest level in 34 years also added to selling pressure on the Dollar.
A separate report showed US home prices for January declined in 16 of the 20 regions measured.
EurUsd climbed to a session peak 1.5658. It was up 1.13% at 1.5611, posting its biggest one-day rise since March 12th. EurUsd is down about 1.9% from last week's record high at 1.5904, but still up almost 7% since the beginning of the year.
Concerns about the health of the US economy and the global financial sector, which were heightened by the downbeat Consumer Confidence and Housing report, pushed the Dollar weaker versus the low yielding Japanese yen and Swiss franc. Low yielding currencies such as the Yen and Swiss franc tend to attract flows during periods of uncertainty as the low interest rates reflect the capital surplus of their respective countries.
UsdJpy slid to an intraday low of 99.63 and erased earlier gains above 101. It was last trading at 100.08 down 0.67%. UsdChf fell 0.98% to 1.0039. GbpUsd was up 0.73% at 2.0023.
The weak Dollar saw Gold and Oil prices rebound from last week's declines, supporting US equities and lifting commodity-based currencies such as Australian and New Zealand dollars.




Today's Key Issues (time in GMT):

09:00 EUR March German Ifo business climate 103.4 vs 104.1
09:00 EUR March German Ifo Current conditions 109.3 vs 110.3
09:00 EUR March German Ifo expectations 97.8 vs 98.2
09:00 EUR January Euro-zone Current Acc NSA €-19.1B vs 1.9
09:00 EUR January Euro-zone Current Acc SA €-10.6B vs -10.3
10:00 EUR January Euro-zone Industrial New Orders 0.3% vs -3.6% (MoM)
10:00 EUR January Euro-zone Industrial New Orders 3.9% vs 2.1% (YoY)
12:30 USD February Durable goods 0.8% vs -5.1%
12:30 USD February Durable goods ex-defense -0.8% vs -4.4%
12:30 USD February Durable goods ex-transport -0.3% vs -1.5%
14:00 USD February New Home Sales 580k vs 588k
21:45 NZD 4Q Current account -3.499B vs -5.174B (QoQ)
21:45 NZD 4Q Current account -13.88B vs -14.23B (YoY)
21:45 NZD February Merchandise trade 3.3B vs 3.4B
21:45 NZD February Trade Balance 180M vs -320M (MoM)
21:45 NZD February Trade Balance -4.57B vs -4.8B (YoY)



The Risk Today:

EurUsd Euro posted a new all-time high 1.5904 last week, confirming medium term trading range 1.5400 – 1.6000. Initial support hold 1.5528 (23.6% retracement of 1.4311-1.5904 advance). Psychological 1.5000 level marks strong key support before 1.4500 pivot point. Initial resistance hold 1.6000 key level.

GbpUsd Cable advanced as high as 2.0398 two weeks ago, 2 ½ month high. It reversed last week below 2.0000 further to profit taking. Actual trading range is 1.9700 – 2.0400. Psychological 2.0100 and 2.0000 supports have been broke last week. Renewed pressure may open the way down to 1.9337 January low and 1.9105 (50% retracement of 1.7049 – 2.1162 advance). Current consolidation over 2.0000 may open the way up 2.0200.

UsdJpy It rebounded from 95.74 last week low. Last week marks the end of a 4-week downtrend. 100 Pivot marks resistance. Bottom support holds 95. On the Upside, only a confirmation over 100 may open the way up to 110.10 strong (Trendline) resistance and mid January double top ahead of 111.92 early January high. Strong support holds 95.74 last week low. Yesterday low 99.63 holds minor support

UsdChf Market remains weak below 1.0200, having traded below 1.0000 psychological level last week. Strong support holds 0.9639 last Monday low. Uptrend would only return over 1.0200 resistances. Early January double top 1.1191 marks strong resistance.


Resistance and Support:




By Jean-Claude Braha - ACM Advanced Currency Markets, Geneva, Switzerland