EURUSD: The euro came under pressure against the broad strenght of the US dollar. EURUSD came off from 1.1210 high in Europe to 1.1165 (-45 pips) The US dollar rose to a one-week high against the basket of major currencies following the hawkish comments yesterday from two U.S. Fed officials and safe haven buying after the terrorist attack in Brussels. Philadelphia Fed President Patrick Harker said the Fed should consider another rate hike as early as next month if the economy improves and prefers to have at least three hikes before the year ends. He adds it was okay to overshoot the 2% inflation target. Chicago Fed President Charles Evans also said he expects two more rate hikes this year, unless eco data comes in stronger than expected or inflation picks up. European stocks rebounded quickly from yesterday; Euro Stoxx 0.49%, German Dax 1.10%.Trading however, has become less active as the Easter Holiday approaches. Expect narrow ranges until Tuesday next week. Fragile support at 1.1165. Option expires at 1.1110.
GBPUSD: The british pound continued to slide from the Asian session high of 1.4225 to the low of 1.4135 in Europe against the broad strenght of the US dollar and concerns over the Brexit three months before the June referendum of Britain's EU membership. A small shortcovering rebound to 1.4200 as stocks & commodities recover. FTSE 0.10%The 3-month GBP option volatility soared. A question comes into mind, if the UK voters chose to leave the EU? Some say the resulting implications on business & labor conditions will likely restrain UK growth and the BOE will need to refrain from raising interest rates. Fragile support at 1.4135 seen.
USDJPY: The japanese yen weakened further against the firm US dollar and rose to the high of 112.85 from 112.20 in Europe. BOJ policy official Funo said, "Relatively upbeat on Japan growth, inflation in the future but the BOJ must maintain current easy stance using all three easing tools at disposal, QE, intervention and interest rates as risk aversion could weigh on sentiment.
USDCHF: Dollar swiss initially rose to the intraday high of 0.9764 from 0.9725 in Asia ( 39 pips) against the broad strenght of the US dollar. However, the rate dipped to 0.9725 at mid-day in Europe as EURCHF fell from 1.0915 to 1.0885 as dealers close their long positions ahead of the Easter Holiday. The dip however, was quickly bought up again by arbitrage players.