USD/JPY Moves Up To 103.84 As Yen Loses Value

EUR/USD: is level for the day, exchanging at 1.3794 and unable to support the 1.38 level after Spanish unemployment indicated a huge drop in cases and yearly GDP met desires, in spite of the fact that quarterly GDP printed underneath figure. The euro also ticked higher. Like the dollar it tends to draw support from prospects of higher world growth and is also supported by expectations the European Central Bank will steer clear on Thursday of any action to ease monetary policy. A rising dollar was this year’s big call for many banks and funds in January and most have been disappointed, with a falloff in growth in China and a euro bolstered by returning flows of capital instead the dominant trends.

GBP/USD: climbed by 14 points after construction PMI printed close to expectations but showing strong growth. The pound is trading at 1.6642 as traders evaluate the Bank of England’s next move now that the economy is recovering steadily. The improved outlook suggests the Bank of England may tighten monetary policy in the next 12 months.

AUD/USD: eased to trade at 0.9235 giving up 13 points after building approvals missed expectations. The currency continues to remain well above its trading range on hopes of stimulus from the Chinese government. The RBA kept the target cash rate at 2.5 percent, as expected, and kept its view that rates won’t change while the central bank supports the economy.

USD/JPY: gained 17 points to trade at 103.84 as the yen loses its value as traders are now expecting the Bank of Japan to add stimulus to offset the negative effects of the sales tax increase which went into effect on April 1st. The combination of rising global equity markets with rising U.S. Treasury yields is a catalyst for USD/JPY to move higher,” said Kit Juckes, analyst at Societe Generale.

Gold: added $3.90 ahead of the ADP payroll release to trade at 1283.90 as traders begin to take position ahead of the ECB and the NFP over the next two days. The ADP jobs report will be the main event that traders are waiting for with data due to be released in just a few hours. Having fallen 8% in just over two weeks, gold “hasn’t found a host of willing buyers looking to pick up cheaper metal,” said UBS analyst Adel Tully. “Some buying interest has emerged on the lows, but further downside has been prevented largely because sellers are in short supply.”