Daily FX Trading Update: Yellen Erases USD Gains – Mar 30, 2016

Daily FX Trading Update: Yellen Erases USD Gains - Mar 30, 2016
The US dollar returned some of its recent gains when Fed Chairperson Yellen sounded extra cautious in her latest speech. She noted that more caution is warranted if the Fed should tighten monetary policy and that they have a range of tools left to ease if necessary. She also pointed out that global economic and financial risks have increased, even though the employment and domestic spending situation remains robust. The CB consumer confidence posted a stronger than expected reading of 96.2 from the earlier 94.0 figure. The ADP non-farm employment change report is due next and a 195K gain is eyed.
The euro advanced to the dollar but struggled to hold on to its current levels against its other forex rivals. There were no major reports out of the euro zone yesterday and only the German preliminary CPI reading is due today. Analysts are expecting to see a 0.6% pickup in price levels.
The pound advanced to the dollar but was also slightly weaker compared to its other peers as there were no major reports out of the UK. There are still no major reports lined up from the UK economy today, keeping market sentiment in play.
The franc regained ground to the US dollar despite the lack of data from Switzerland. Today has the UBS consumption indicator on tap and a rise from the earlier 1.66 figure could mean more gains for the Swiss currency.
The yen managed to hold on to its recent gains as risk appetite remained weak in the forex market. Data from Japan has been mixed, with its latest preliminary industrial production figure falling short of consensus. The report showed a 6.2% fall versus the projected 5.8% decline.
Commodity Currencies (AUD, NZD, CAD)
The comdolls were able to advance against most of their counterparts as Fed head Yellen’s dovish rhetoric supported business and consumer confidence. Leading inflation indicators from Canada missed expectations while New Zealand’s building consents report posted a 10.8% rebound. US crude oil inventories data is due next.
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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.