USD/INR – The Indian rupee opened little changed against the dollar amid muted regional cues. Traders await tomorrow’s interest rate decision by India’s Monetary Policy Committee and updates on trade negotiations between the U.S. and China. The rupee opened at 71.55 to a dollar versus its previous close of 71.56. For regional currencies and equities, progress on trade talks between the U.S. and China remained the main point of attention. Senior U.S. and Chinese officials are poised to begin another round of talks in Beijing next week, as reported. The report of new rounds of talks comes following the conclusion of high-level talks in Washington last week.
EUR/USD – The euro was little changed at $1.1400 after slipping 0.25% the previous day to its lowest since Jan. 28. The single currency was pressured after a survey released on Tuesday showed euro zone businesses expanded at their weakest rate since mid-2013 at the start of the year. EUR/USD is extending its correction from last week’s high and could accelerate lower if key short-term support fails to hold. Factors weighing on EUR/USD include January’s Markit services PMI for both Italy and France. Both printed below 50, which indicates economic contraction and also reinforces views of slowing euro zone economic growth. Those factors combined with persistent dollar strength have driven EUR/USD to new short-term lows.
GBP/USD – The pound extended an overnight slump and brushed $1.2923, its lowest since Jan. 22. Sterling had lost nearly 0.7% on Tuesday on a weak Purchasing Managers’ Index data and uncertainty about Brexit talks. GBP/USD has come under pressure sue to weak British economic data and fading momentum for either a Brexit delay or second referendum. Added to GBP/USD’s woes are relatively firm U.S. data releases, nonfarm payrolls and ISMs. The U.S. data hints that although the Fed remains on hold, the relative growth outlook remains more upbeat there than in Europe or Britain, which should keep the dollar bid. As the March 29 Brexit deadline approaches, nervous GBP longs will likely trim positions as volatility and uncertainty rise. GBP/USD was last trading at $1.2950.
USD/JPY – The dollar was steady at 109.76 yen after posting a gain of 0.4% overnight. Rather than Japanese exporters who had been selling into recent USD/JPY rallies, it seems option players will now be more aggressive sellers of the pair. Very large option expirations are slated today and tomorrow between 110.00-50, and these could thwart fresh moves on the part of USD bulls to take the pair higher. Up does remain the direction of least resistance however as evidenced by the quick rally from 108.49 on January 31, but given the weight of expirations above, another push higher in U.S. yields may be needed. Option expirations will also work to support the downside however with even larger amounts seen down to around 109.00 today and tomorrow.
Currency Range for today
Important data releases today
|7:00 PM||USD||Building Permits||1.290M||1.328M|
|7:00 PM||USD||Core Durable Goods Orders (MoM)||0.2%||-0.3%|
|7:00 PM||USD||Core Retail Sales (MoM)||0.0%||0.2%|
|7:00 PM||USD||GDP (QoQ)||2.6%||3.4%|
|7:00 PM||USD||Retail Sales (MoM)||0.1%||0.2%|