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Mixed Performance in G10, Greenback Consolidating Weekly Decline

FOREX
  • The USD index is slightly firmer on Friday but looks set to post a 0.65% decline on the week amid a more stable global outlook and an associated ~3% rally for the S&P 500.
  • A mixed performance across G10 on Friday with a raft of US data potentially muddied by month-end flows as we approach the weekend.
  • Early strength was seen in USDJPY, which showed above 133.50 for the first time since March 17th, largely in response to the BoJ outlining their bond-buying schedule for Q2, expanding the maturity range of purchases to incorporate the super-long end of the curve. The tweaked schedule outlines the ability of the BoJ to remain flexible amid global pressures.
  • Despite the firm price action this week for USDJPY, in the face of broad greenback weakness, medium-term bearish signals continue to prevail from a technical perspective. This may have been highlighted by some weakness into the close which sees the pair around 80 pips off best levels at 132.80.
  • EURUSD was also unable to gather further topside momentum on Friday, again stalling just short of key short-term resistance at 1.0930, the Mar 23 high. A break of this level is required to reinstate the recent bull theme and signal scope for a climb towards 1.1033, the Feb 2 high.
  • Instead, the pair gradually drifted lower, but picked up the pace approaching the WMR month-end fix, which saw the pair trade down to 1.0858. Similar price action for GBPUSD which after failing to make early headway above 1.24, now sits at the day’s worst levels around 1.2340 approaching the close.
  • A relatively quiet week lies ahead, with the long Easter weekend starting Friday and China out early next week. Swiss CPI and US ISM Manufacturing PMI will headline Monday’s docket. Monetary policy decisions in both Australia and New Zealand are due on Tuesday and Wednesday respectively.
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