Shifting Growth Expectations Supporting USD |
A return of the European debt crisis combined with expectations of slowing global growth has broadly supported dollar over the past month. Should the Greek parliament approve the additional austerity measures USD strength may to wane in line with the longer term trends of the FX markets. However, in the near-term higher yielding currencies such as the AUD, NZD, and CAD could face headwinds should commodity prices continue to decline along with a further deterioration in the already sluggish US economic data.
Economic Data Releases:
GBP – Current Account – 08:30 GMT
Expectations: -5.0B. Previous: -10.5B.
UK trade data is expected to show an improvement in Q1 of this year and may support sterling in the short term. Unfortunately the effect of last week’s UK MPC meeting minutes that opened the door for additional asset purchases may void the pound from maintaining any near term gains. Today’s inflation report hearings at 09:00 GMT may also touch on the downside risks to inflation. On the charts 1.5880 is the 61.8% retracement from the January to April high. Below that the next support is the late January low at 1.5750. Resistance comes in at 1.6100.
USD – CB Consumer Confidence – 13:00 GMT
Expectations: 60.8. Previous: 60.8.
No change is expected in the US consumer confidence numbers as the drop in oil prices may not have trickled down yet to the US consumers’ wallets. EUR/USD resistance may be found at the 1.4350 where the current consolidation pattern rests while support is found at 1.4070 and 1.3970.
About the author: Forexyard
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