Amari tries to back track ahead of Bernanke report on Wednesday

<p>A raft of weaker US data hit the wires yesterday afternoon but despite an initial knee jerk reaction, USD is opening in Europe this morning […]</p>

A raft of weaker US data hit the wires yesterday afternoon but despite an initial knee jerk reaction, USD is opening in Europe this morning at pre data levels, with further gains against commodity currencies.  Even NZD is not immune to USD strength despite recent robust data and the interest rate outlook. I’ve searched for headline or reasoning for the overnight moves but my contacts in Asia tell me that this move was completely flow driven, with a huge order in the kiwi triggering stops.

There were interesting comments from Fed’s Williams from San Francisco, who normally sounds dovish. He joined Fed members Fisher, Plosser and Lacker in saying that slowing of MBS purchases could be forthcoming. According to Williams, “It’s clear that the labour market has improved since September.” “We could reduce somewhat the pace of our securities purchases, perhaps as early as this summer and end the programme late this year.” Although Williams is not a voting member this year I find these comments very interesting ahead of Chairman Bernanke’s scheduled speech over the weekend.

Today’s data consists of European construction output with the US session bringing us the University of Michigan confidence report and leading Indicators.

 


EUR/USD

Supports 1.2840-1.2790-1.2745 | Resistance 1.2935-1.2950-1.3012


USD/JPY

Supports 102.05-101.85-101.20 | Resistance 102.80-103.30-103.80


GBP/USD

Supports 1.5180-1.5155-1.5100 | Resistance 1.5300-1.5325-1.5380

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