The U.S. Dollar (USD) heads into the U.S. morning session after a mixed Wednesday against its major counterparts.
The EURUSD is currently trading at 1.3888, a 0.20% gain on the day’s open. The Euro strength comes as data showed gains in industrial production (YoY), rising 2.1% compared to the 1.2% the same time last year, and beating a forecast of 1.9%. Also boosting the Euro was European Central Bank (ECB) executive Benoit Coeure’s suggestion that the central bank does not see inflation as a near-term risk in the Eurozone. Whether the risk-off sentiment caused by the situation in Ukraine will lead to the USD recouping some of the decline during the European afternoon remains to be seen.
The Australian Dollar (AUD) is feeling the impact of a potential Chinese slowdown. Investors increasingly see the Australia as a proxy for China, largely based on the nation’s reliance on the Chinese economy. As China revealed exports dropped nearly 20% over the weekend, Australian markets sold-off and the AUD looks to be following suit. Having gapped down into Monday’s trading, the AUDUSD has seen three consecutive days of decline to Wednesday. The pair is currently trading at 0.8953, a 0.28% decline on the day’s open.
The U.K. Sterling (GBP) is trading at 1.6616, flat against the day’s open after recovering from a small dip during the European morning session.**relatedarticle**
Elsewhere, the USDJPY fell below Thursday 6 lows of 102.74, currently trading at 102.65, a 0.34% discount to the day’s open. The decline comes despite worse than expected data coming out of Japan during the late Asian session, with the Japanese Cabinet Office reporting a fall in household confidence to 38.3, missing expectations at 40.3.
Looking at the schedule, Treasury Secretary Jack Lew is set to testify on the 2015 Budget before the House Budget Committee in Washington DC during the U.S. afternoon session. The U.S. budget is something of a hot-topic at present, and so any allusion to monetary policy could serve up some volatility in the USD crosses before the day is out.
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