· Australia’s dollar dropped one percent on Wednesday after weaker-than-expected inflation numbers heightened the prospect of an interest rate cut, while the U.S. dollar held firm within a whisker of the previous session’s month high.22-
The greenback was propelled higher by strong U.S. housing data - the latest indicator to suggest the American economy is outgrowing rivals, encouraging investors to snap up the U.S. currency in recent weeks.
The Aussie was the biggest mover among the main currencies, falling to a 1-1/2 month low of $0.7027.
The dollar index, which measures the U.S. currency versus a basket of six major rivals, stood at 97.660 after rising to 97.777 overnight, its highest since June 2017.
The euro weakened 0.2 percent to $1.1202 but held above Tuesday’s lows of $1.1192.
“The European economy looks particularly weak relative to the U.S. economy and this highlights the euro’s weakness,” said Takuya Kanda, general manager at Gaitame.Com Research.
“The United States is now expected to have experienced firm growth in the first quarter, reinforcing the dollar’s strength relative to the euro.”
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USD/JPY fades an uptick to 112.00 amid mixed Asian equities
The USD/JPY pair continues to trade choppy in familiar ranges, with every upside attempt being sold-off into the 112 handle amid broad US dollar strength and mixed Asian equities. Focus shifts to the US durable goods and Q1 prelim GDP data.
The pair resumed its decline despite broad dollar's strength dominated the FX board, having pierced the bottom of its latest range, now hovering around it, somehow indicating an increased bearish potential. The 4 hours chart shows that the pair is still unable to advance beyond a now marginally bearish 20 SMA, but continues developing above the larger ones, and with the 100 SMA advancing above the 200 SMA. Technical indicators stand directionless within negative levels, skewing the risk toward the downside, particularly if the pair accelerates below the 100 SMA, currently at 111.60.
Support levels: 111.60 111.25 110.90
Resistance levels: 112.15 112.50 112.85
· The U.S. will send a high-level delegation to Beijing next week as trade negotiations with China continue.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will head to Beijing for talks that start on April , Press Secretary Sarah Huckabee Sanders said in a statement. They will meet with Chinese Vice Premier Liu He.30
Following those talks, Liu will lead a delegation to Washington for further discussions that begin on May 8.
· China, which is home to about half of the world’s pig population, has been ravaged by an outbreak of African swine flu recently, a virus for which there is no cure or vaccine.
This could lead to higher hog prices, which could force China to make concessions in its negotiations with the U.S., says Bank of America Merrill Lynch analyst Ross Gilardi.
· Spain is holding a snap election on April and the vote may throw up some surprising results that could have ramifications for the wider political landscape in Europe.28
Prime Minister Pedro Sanchez, the leader of the Spanish Socialist Workers’ Party (PSOE), called the election in February. This came after Catalan pro-independence parties, on whose support Sanchez’s minority government relies, joined forces with the center-right opposition and rejected the government’s 2019 budget proposals.
Opinion polls in recent weeks have consistently signaled that Sanchez’s socialists could win the largest share of the vote — but not enough for the party to govern alone.
· Oil prices fell on Wednesday amid signs that global markets remain adequately supplied, despite a jump to highs this week on Washington’s push for tighter sanctions against Iran.2019
Brent crude futures were at $74.17 per barrel at 0637 GMT, down 34 cents, or 0.5 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $65.96 per barrel, down 34 cents, or 0.5 percent, from their previous settlement.
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Brent Oil: Rally stalls with double top on hourly chart
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