The U.S. dollar continued to suffer losses against most of its major counterparts, except for the Japanese yen, as the weak March NFP figure dashed hopes of earlier than expected monetary policy tightening from the Federal Reserve. There were no major market-moving releases from the U.S. yesterday but some minor reports did highlight the ongoing slowdown. The NFIB small business index revealed that activity slowed down in March as the reading fell from 90.8 to 89.5. Today, the U.S. will release the minutes of the latest FOMC meeting but these aren't likely to have a material impact on price action as the meeting was conducted prior to the dismal NFP release. Also due today are the Federal budget balance and the crude oil inventories.
The euro rallied against both the U.S. dollar and the Japanese yen in yesterday's trading, despite the lack of top-tier data from the euro zone. German trade balance came in stronger than expected while the French trade balance missed expectations. For today, France and Italy will print their industrial production data and stronger than expected figures could provide support for the euro.
Data from the U.K. came in mixed yesterday as the manufacturing and industrial production figures both exceeded the consensus while the trade balance came in worse than expected. Manufacturing is up by 0.8%, twice the estimated 0.4% growth, while industrial production grew by 1.0%. The trade deficit widened from 8.2 billion GBP to 9.4 billion GBP, larger than the estimated 8.7 billion GBP shortfall. There are no reports due from the U.K. today which suggests quiet trading among pound pairs unless there's a significant change in market sentiment.
Swiss data came in weaker than expected yesterday as the CPI and retail sales figures both missed forecasts. The Swiss CPI posted a 0.2% uptick, lower than the projected 0.3% increase and the previous month's 0.3% rise, while retail sales grew by 2.4% and not the 2.9% jump that was expected. There are no reports on Switzerland's schedule for today as USD/CHF and EUR/CHF may stay in consolidation.
Yen bears seem to have run out of steam as most yen pairs consolidated around significant inflection points yesterday. However, bias for the yen is still very bearish as the BOJ's decision to implement aggressive easing measures is likely to have a long-term effect on yen pairs. There are no major reports on the yen's schedule for today but do keep an eye out for the next set of reports due in tomorrow's early Asian session. Core machinery orders and M2 money stock figures are up for release then.
Commodity Currencies (AUD, CAD, NZD)
Weaker than expected data from China might weigh on the Australian dollar in the near term as China printed weak CPI and trade balance. Annual inflation is at 2.1%, lower than the estimated 2.5% increase and the previous 3.2% reading. The trade balance posted a surprise deficit of 0.9 billion USD instead of the expected 15.2 billion USD surplus. Meanwhile, Canadian housing data came in mixed with housing starts rising more than expected and building permits coming in short. New Zealand will be releasing its Business NZ manufacturing index in tomorrow's Asian session so watch out for NZD/USD action around then.