Buy dollars wear diamonds despite soft US data

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

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

Interesting comments from the Fed’s Sanfrancisco’s Williams who normally sounds dovish joined other Fed members Fisher, Plosser and Lacker that slowing of MBS purchases could be forthcoming. 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 program late this year.” Although Williams is not voting member this year I find these comments very interesting ahead of Chairman Bernanke’s scheduled speech over the week-end.

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

 


EUR/USD

Supports 1.2840-1.2800-1.2745 | Resistance 1.2950-1.3000-1.3030


USD/JPY

Supports 101.80-101.20-100.75 | Resistance 102.75-103.00-103.75


GBP/USD

Supports 1.5180-1.53301.5120-1.5050 | Resistance 1.5525-1.5600-1.5630

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