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USD
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The U.S. dollar continued its dovish momentum overnight, falling against the majority of its major counterparts as global risk sentiment has improved. Indeed, stocks from Germany to Japan rose and U.S. equity futures show the Dow Industrial Average will open near 13,000. Later this morning, the economic docket is expected to show the University of Michigan consumer confidence reading is expected to register at 73.0, up from 72.5 the month prior. Also, New home sales are expected to rise 2.6% in January, from a –2.2% reading in December. The dollar was also under pressure ahead of speeches later today by Federal Reserve policy makers including New York Fed President William Dudley, St. Louis Fed President James Bullard and Philly Fed President Charles Plosser. |
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EUR
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The Euro continued to strengthen against its major counterparts, reaching new two-month highs against the sterling, loonie, and U.S. dollar. German GDP met expectations, showing growth of 1.5% in the fourth quarter. Private consumption slipped lower, at –0.2%, and capital and construction investment both increased to 1.1% and 1.9% respectively. European Union Ministers have given Greece seven days to complete a checklist of reforms ranging from cutting public pensions by 300 million euros, to changing the way drugs are prescribed. If these reforms are not met Greece will not receive the second bailout package, forcing them into a disorderly default. |
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GBP
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The British pound gained against the U.S. dollar overnight, erasing nearly all of losses incurred following the Bank of England minutes released earlier this week. U.K. GDP was on par with expectations, contracting –0.2% in the fourth quarter. However, private consumption rose more than the forecasted to 0.5% easing concerns that a recession is inevitable. |
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JPY ¯
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The Japanese yen fell against all of its counterparts and touched a fresh 7-month low against the U.S. dollar. The yen has fallen nearly 4.0% against the greenback since the Bank of Japan unexpectedly expanded its asset-purchase program on February 14th. Indeed, the BoJ said it would expand its asset-purchase program to 30 trillion yen from 20 trillion. Japan’s currency has tumbled 6.1% in the past month, the biggest loser among 10 developed-nation currencies tracked by Bloomberg Correlation Weigthed Indexes. |
