Dollar Soft While DOW Hits Another Record

Risk appetite continued to be strong as DOW surged to another record high of 14865. S&P 500 jumped to 1593.37. The better than expected jobless claim figure released overnight somewhat eased the concern of slowing labor market recovery in U.S. It is now a matter of time when DOW and S&P 500 hit 15000 and 1600 psychological level respectively. However, the price actions in other markets are rather muted. Gold is stuck in range below 1600, while crude oil stayed between 92 and 95. The dollar received little support from surging U.S. stocks and indeed, dollar index's break of 82.14 support on Thursday could be viewed as a reverasal alert.

In the forex markets, European majors strengthened against the greenback this week. While momentum is a bit unconvincing, Euro, Sterling and Swissy still have the upper hand against the greenback. The yen edged lower broadly with weak momentum; the USD/JPY touched 99.94 but is still held below the 100 psychological level. Commodity currencies are strong on risk appetite and hunt for yields. The NZD is the strongest currency for this week, with additional help from selloff and AUD/NZD.

Bloomberg reported that IMF will lower the U.S. growth forecast for 2013 to 1.7%, down from prior projection of 2.0% as fiscal tightening would restrain consumption. The global economy is expected to grow 3.4% this year, lowered slightly from 3.5%. Eurozone economy is expected to contract -0.2%, unchanged from the prior forecast. Japan's growth is revised to 1.5%, up from prior 1.2%.

Looking ahead, U.S. retail sales are the major focus and are expected to be flat in March, with ex-auto sales rose 0.2%. PPI is expected to climb to 1.9% yoy with core PPI unchanged at 1.7% yoy. The U.S. will also release U of Michigan sentiment and business inventories. The eurozone will release industrial production.