After a brief respite around the month and quarter end, the US dollar is poised to close another week lower. Global investors are selling the greenback once again this Thursday, one day ahead of the US March non-farm payrolls report and the long Easter holiday weekend. On Wednesday, more doubt was cast over sustainable US growth for 2015 as ADP reported fewer new private sector jobs for March than had been expected, and a slew of economic indices missed expectations. Fed Chairman Janet Yellen will be speaking this morning, making the welcoming remarks at a conference in Washington, D.C. Economic data was broadly limited overnight as most European markets will be closed on Friday.
The only data release of note across the pond came in the form of UK construction PMI. Although this latest read missed the mark, coming in at 57.8 versus 59.5 expected, the pound is still trading higher against the dollar as Tuesday’s sell-off is confirmed to be short lived. Currently, all eyes in Europe and around the world are centered on the Iran-Nuclear negotiations happening in Switzerland. While all sides remain optimistic about a deal, the talks are now two days past due as world leaders try to come to some kind of compromise. The Wall Street Journal is reporting this morning that Greece continues to make little headway on their ongoing negotiations. The troubled nation continues to try to end its standoff with international creditors, facing the prospect of another month starved for cash. Most of Europe and the UK will be off tomorrow andMonday so trading should grind to a reluctant halt.
In Asia, it was commodities the paced the markets as iron ore prices dropped below the $50 mark. The Australian dollar has lost nearly 1% in value over the last 24 hours despite a slightly smaller trade deficit as both exports and imports showed a slight bump in February. The Reserve Bank of Australia is expected to announce another rate cut next Tuesday, the first trading day after markets close down under for the Easter holiday. In Japan, the yen continues to be pinned to the 120 mark for now, but should the Iran talks finish without a deal, it could spark a furious yen rally as a flight to safe haven assets is expected. As those talks continue, the risk lies in a sharp drop for USDJPY, perhaps to test lows around 118. Japanese stocks ended 1.50% higher, ending a three day sell-off around their fiscal year end.
Turning to the US, the dollar is finding some brief support following the release of weekly jobless claims. Only 268k Americans filed for new unemployment claims, down 20k from last week. While economic data in the US has waned over the last few weeks, the jobs market continues to be the shining light, possibly carrying the Fed to raise rates at the end of the summer. Tomorrow, the US will release a slew of economic data, and being the only market to be reporting data, it could make for an interesting close to the week. March non-farm payrolls are expected to be in the range of +295k as the world’s largest economy continues to expand in possibly the most important sector. The Canadian dollar continues to rise on Thursday, recovering nicely from the quarter end decline. As oil prices have stabilized, the Loonie is trading over 1% higher after the USDCAD rate got up toward the $1.2800 level on Tuesday. Canada will be closed on Friday for the Easter long weekend.
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