USDollar Holds Bid

fx2
The dollar remained bid in quiet European trade today with USDJPY once again recovering the 114.00 figure while both euro and cable continued to slide lower.
There was no major economic news in either Asia or European trade today with the exception of Chinese trade data which came in as a bit of a shock at -9.1B deficit rather than 25B surplus that was projected. This was the first deficit in 3 years and it was driven mainly by stockpiling of commodities including oil, coal and iron ore.imports skyrocketed by 38.1% while exports declined by -1.3% creating the massive gap this month. Reaction in the currency market, however, was limited. Aussie declined by less than 10 pips in response to the news as traders shrugged off the results because of the skew caused by the Chinese New Year. The seasonal swings at this time of the year tend to be very wide. Still, the massive deterioration in China’s terms of trade could become a much more serious issue if the data does not rebound next month. The longer term trends indicate that trade flows have slowed and that could begin to weigh on the yuan over the long term.
Meanwhile today’s action in North American session is likely to focus on the ADP data due at 8:15 New York time. The market is looking for a pullback to 184K from the 246K reported last month. Any print sub 150K could snuff out the dollar rally as doubts will creep in about the possibility of a March hike, but if the data proves supportive – especially if it prints above the 200K barrier, USDJPY could make a run towards the 114.50 barrier as the day proceeds, while cable which continues to be the weakest of the majors against the buck could test the 1.2100 figure on additional pro-dollar flows.
Advertisements

About FxCox™

‎Portfolio Management
This entry was posted in Fx Market. Bookmark the permalink.