EUR/USD
The EUR/USD's move in the New York session was led by dollar buying after the better-than-expected Chicago national-activity index print,” said Brad Bechtel, managing director at Faros Trading LLC in Stamford, Connecticut. “Dollar-yen had the most pronounced move overnight on the unexpectedly weak trade figures.” The dollar gained for a seventh day against a basket of peers, the longest streak in almost a year, as revised data in a Federal Reserve Bank of Chicago index signaled greater-than-forecast strength in the economy. Mario Draghi can look for clues from euro-area companies this week on whether the region needs more stimulus to counter economic risks from low inflation to geopolitical tension. Euro was little changed.
GBP/USD
Sterling climbed to the highest level in more than four years against the greenback and reached a six-week high versus the euro as the employment data added to signs the recovery is gaining momentum. The pound also appreciated versus the dollar after Federal Reserve Chair Janet Yellen signaled the U.S. central bank will keep an accommodative monetary policy that has debased the greenback. U.K. government bonds declined. “Strong employment numbers have boosted the pound,” said Neil Jones, head of European hedge-fund sales at Mizuho Bank Ltd. in London. “The pound has also benefited from a weaker U.S. dollar after Yellen’s comments.”
USD/JPY
Japan’s trade deficit widened to 1.45 trillion yen ($14.1 billion) in March, from 802.5 billion yen the previous month, the Ministry of Finance said today. The deficit was a record 2.8 trillion yen in January. The nation’s core consumer-price index rose 1.6 percent in March from a year earlier, “Japan’s trade deficit was much larger than expected, so it helped to push the yen lower,” said FX Prime’s Ueda. “We’re likely to shift to a dollar strength story from a yen weakness story going forward as we start to see good data from the U.S.” The yen fell 0.2 percent to 102.62 per dollar after sliding 0.8 percent last week, the biggest decline since the five days to March 21. Japan’s currency was little changed at 141.55 per euro., and 102.50 per dollar.
USD/CAD
Canadian consumer confidence surged to the highest in more than three years amid rising optimism over the outlook for real estate and the economy. The Bank of Canada said last week it continues to see a “gradual strengthening” of the world’s 11th largest economy, even as it trimmed its forecast for growth this year to 2.3 percent from 2.5 percent. The country’s recovery hinges on an upturn in exports and investment, Canada’s inflation rate rebounded in March as rising energy prices triggered the biggest gain in shelter costs in more than three years, Statistics Canada reported April 17. “Inflation appears to have bottomed out and we believe that it should gradually drift higher for the rest of the year,” Charles St-Arnaud, Nomura Securities International Inc. senior economist, said in a research note after the report. Canadian dollar rose to 1.1020.
