The Japanese yen and Swiss were the biggest winner last week as markets were hit by risk aversion. Dow Jones 30 suffered big weekly loss of -415 pts or -2.3% to close at 17712.66. S&P 500 also dropped -47 pts, or -2.2% to close at 2061.02. Canadian dollar originally followed closely as lifted by rebound in crude oil. WTI rebounded to as high as 52.48 but lost steam afterwards to close at 48.43. Canadian dollar followed and turned negative against dollar ,euro and yen . Markets were rather mixed elsewhere. Dollar was soft for most of the week but recovered towards the end and closed higher against Sterling , Aussie and Loonie. It was, overall, a relatively direction less week, except for weakness in stocks. But the consolidative actions could ended in this event-packed, holiday-shortened week ahead.
Non-farm payroll from US will be released on Good Friday. Before, personal income and spending as well as ISM manufacturing will be watched. Euro traders will look into CPI to be released on Tuesday. Sterling traders will look into PMI manufacturing and construction. Aussie will watch building approvals and China PMI manufacturing. Japan will also release quarterly tankan survey. Here are some highlights:
- Monday: German CPI; Swiss Kof; Canada RMPI, IPPI; US personal income and spending
- Tuesday: New Zealand business confidence; German unemployment, Eurozone CPI, unemployment; UK GBP final; Canada GDP; US Chicago PMI, consumer confidence
- Wednesday: Japan tankan; China PMI manufacturing; Australian building approvals; Eurozone PMI manufacturing final; UK PMI manufacturing; US ADP employment, ISM manufacturing
- Thursday: Australia trade balance; UK construction PMI; Canada tarde balance; US trade balance, jobless claims, factory orders
- Friday: US non-farm payroll
Technically, recent price actions in dollar are still viewed as consolidative. After all, EUR/USD was held below 1.1096 resistance. USD/CAD, held above 1.2406 support. AUD/USD breached corresponding level of 0.7912 briefly but couldn't sustain above. More apparent weakness was seen against yen and swiss franc only. The dollar index is trying to draw support form medium term channel for the moment and is held above 95.48 support so far. The outlook stays bullish for extending the larger up trend. The corrective price actions from 100.39 eased some concern of trend reversal and we'd favor, as long as 95.48 support hold, further rally to long term fibonacci level of 61.8% retracement of 121.02 to 70.69 at 101.79 next.
Elsewhere, Euro stays near term bearish against dollar, Sterling, yen, Swiss franc, Canadian, and Aussie. It remains the favored currency to sell. The question in on which one to sell it against. We'd have some reservation on dollar this week and prefer to have NFP clearing out the trend before jumping in. Meanwhile, yen and swiss franc do have a bit of upper hand against dollar. But that would be rather dependent on development in stocks, which are, then dependent on NFP. Thus, overall, we'll prefer to hold our hands for another week and wait for NFP to guide the direction.