Demand for the greenback keeps on rising after the strong US labor market data released on Friday. However, we have to note that the US dollar longs contacted on a week that ended on March 3. Large players have some doubts about the USD rally sustainability. Watch the retail sales figures on Thursday – we could see growth after two months in the negative territory.
EUR/USD is trading at the 2003 lows (1.0720 as we write). The ECB’s QE program has finally been launched yesterday. The ECB Governor Mario Draghi is scheduled to speak tomorrow in Frankfurt.
GBP/USD attempted to recover after a sharp selloff on Friday, but faced resistance at 1.5130. Next levels to watch below the price are 1.5030, 1.5000 and 1.4950. Watch the UK manufacturing data (forecast: 0.2%, prior: 0.1%) and the NIESR GDP estimate on Wednesday. EUR/GBP fell to its lowest level since December 2007.
USD/JPY pushed to a new high of 122 yen on Tuesday – this is the lowest level since summer 2007. Japan is scheduled to release core machinery orders tonight (forecast – downbeat). Commodity currencies are also doomed for a decline. Aussie dollar holds around the 5-year lows below the 0.7700 mark, while NZD/USD dipped below 0.7250. Watch industrial production data in Chana tomorrow – growth is expected to have slowed from 7.9% to 7.7%. RBNZ will announce its monetary policy decision tonight – some economists forecast a rate cut.
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