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Greenback Spikes On US Data, Pares Gains Into The Close

  • The USD had been trading on the back foot on Friday before stellar US data prompted a spike to the best levels of the session. Above expectation manufacturing and services PMIs saw the USD index rally the best part of half a percent with a notable uptick for USDJPY. However, the greenback pared these gains into the close and looks set to post a very minor adjustment for the week with expectations for the May FOMC meeting looking set in stone.
  • The poorest performers are AUD & NZD across the final session of the week, undoing the late rally across AUD/USD and NZD/USD into the Thursday close. NZD/USD printed down at 0.6127 ahead of the NY crossover following on from the weak NZ CPI data seen early Thursday. This represents the lowest level since early March, narrowing the gap with key support of 0.6085.
  • USDCAD has drifted 0.5% higher on Friday, nearing 1.3550 again. The pair has seen a 1.3% advance on the week in a solid reversal of prior oversold conditions. There was limited reaction in the pair to CAD retail sales with a weak March advance release (caveated by a low response rate), but it helps CAD underperform. 1.3582 remains in focus, the 50% retrace of Mar 10-Apr 14 bear leg.
  • EURUSD has showed a degree of resilience, hovering just below the 1.10 mark. However, it is worth noting that price action has been limited within Monday’s 90 pip range all week as markets await further tier-one US data and monetary policy decisions from both the Fed and the ECB over the next two weeks.
  • The highlight on Monday will be the German IFO Survey: The IFO sentiment index is seen stalling at 93.3 in April, after five consecutive months of improvement. Highlights for the week ahead include advanced US Q1 GDP and German Flash CPI readings. Australian CPI and a BOJ meeting are also on the docket.

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