Commodity currencies recover mildly today as stock markets stabilized. While Japan market is still on holiday, other Asian markets pared back much of initial losses. Aussie is also supported by better than expected economic data and a fibonacci level against dollar. Australian retail sales rose 0.4% mom in March versus expectation of 0.3% mom. trade deficit narrowed to AUD -2.16b in March versus expectation of AUD -2.95b. Some economists noted broad based improvements in exports, with goods and services credits rose 4%, non-monetary gold up 48%, non-rurual goods up 2%. Meanwhile, services exports rose 3%. Aussie was sold off earlier this week after RBA's surprised rate cut and is probably taking a breather now.
In US, Minneapolis Fed president Neel Kashkari said that aggressive rate hike "would be setting the brakes on the economy" and Fed will move "when the data allows". The greenback struck a come back this week as two Fed officials noted that a June hike is a "real option". At this point, fed fund futures are only pricing in 13% chance of a June hike. But the expectations could change much after April and May employment data, including wage growth. Dollar is currently at a technical juncture and would be very sensitive to the change in expectations and thus the incoming data.
Elsewhere, China Caixin PMI services dropped to 51.8 in April. Eurozone will release retail PMI today. But focus will be on ECB monthly bulletin and UK services PMI. Canada will release building permits while US will release jobless claims as usual.