Commodity currencies continue to edge higher today together with Sterling and strong momentum is seen in Aussie. Meanwhile, Yen remains weak on return of risk appetite while Euro is feeling the pressure from expectations on ECB easing. Stock markets are taking a breath for the moment and might trigger some consolidations in the currency markets. Also, crude oil is still struggling to take out 35 handle decisively and is losing some upside momentum. Gold is also stuck in recent consolidation between 1200 and 1250.
Fed's latest Beige Book, prepared by Kansas City Fed, suggested that economic activities increased in most regions from early January to late February. While consumer spending increased in most districts, manufacturing activity was flat due to strength in US dollar. Dollar traders will turn their focus to ISM non-manufacturing composite today. But main attention will stay on tomorrow's non-farm payroll report.
In Eurozone, ECB executive board member Benoit Coeure said that the central bank is "studying carefully schemes used in other jurisdictions to mitigate possible adverse consequences for bank lending channels". Governing council member Francois Villeroy de Galhau said that the central bank "must avoid that expectations of future inflation don't become too pessimistic."
In Japan, BoJ deputy governor Hiroshi Nakaso pledged that "we will be a terminator of deflation ... We'll look to see if there is room to take further policy steps as many times as needed to eradicate deflation." But he also urged "structural reform to raise the potential growth rate must be pursued in tandem to bring Japan's economy back on track toward sustained growth."
On the data front, Australia trade deficit narrowed to AUD -2.94b in January. China Caixin PMI services dropped to 51.2. in February. UK PMI services will be the main focus in European session while Eurozone will release retail sales and PMI services finals. US will release Challenger job cuts, non-farm productivity, jobless claims, factory orders and ISM services.