EUR/USD
The European Union’s bid to set out structure rules for about 30 of the bloc’s largest banks hit an early stumbling block as finance ministers challenged aspects of the plans that they said could harm lending to businesses. The proposal, presented in January, would ban the bloc’s most systemically important lenders from proprietary trading and hand regulators the power to split them up according to EU-level standards. Barnier has said that blueprint is a “cornerstone” of the EU’s fight against too-big-to-fail lenders that has dominated his five-year tenure. While Germany believes that the EU should follow an approach that corresponds to the U.S. strategy, which is “that we can’t regulate everything in detail, abstractly and universally, but that we give the supervisor much more the instruments and the discretion to enable it to take the right decisions in every particular case,” Schaeuble said. The euro strengthened 8.1 percent over the past year, snapping four straight annual declines from 2009 through 2012, euro was little changed.
GBP/USD
The pound snaps six day advance as factory growth slows. A Purchasing Managers’ Index was at 62.5 compared with 62.6 in February. A gauge of homebuilding rose to 64.4 from 62.1 and sentiment among executives increased to the highest in more than seven years. House building reclaimed its place as the main driving force behind strong construction output growth in March, following some weather-related disruptions,” said Tim Moore, senior economist at Markit in London. It’s being supported by “resurgent demand for development programs and supportive funding conditions.” The pound traded at 1.6620.
USD/JPY
Japanese Prime Minister Shinzo Abe’s bid to rid the economy of 15 years of deflation got a boost, as companies forecast sustained price gains. The inflation rate will be 1.5 percent in a year’s time and 1.7 percent in three years and in five years, according to average forecasts in a Bank of Japan survey conducted from Feb. 24 to March 31 and released in Tokyo today. While the central bank may fall short of its target of a stable 2 percent increase in its benchmark price gauge, the forecasts show Abe and BOJ Governor Haruhiko Kuroda are succeeding in fueling inflation expectations. The data give the central bank another reason to hold off from any immediate additional monetary easing as it assesses the blow to economic growth from yesterday’s sales-tax increase, the dollar yen was little changed.
USD/CAD
Annual inflation in Canada’s most populous province is forecast to average 2 percent over the same time frame, down from 3 percent, the Liberal government said in an economic outlook released today. The cooling economy is largely due to an aging society that will see people aged 65 and older grow to nearly 24 percent of the population in the next two decades from 15 percent in 2013. , .The province will trail 2.4 percent average annual growth in the U.S., its largest trading partner, over the next 20 years and global growth of 3.1 percent, the report projects. The Canadian dollar will stay in a range of 90 to 100 U.S. cents in the period, above its 40 year average of 80 U.S. cents, making Ontario’s manufacturing exports less competitive than in the past, the Canadian dollar was a little changed.
