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    European Session – Dollar rises above 109 yen, euro tests $1.14

    The yen was one of the worst performing major currencies today while oil recovered some of yesterday’s losses. It was mainly quiet on the data front, with only UK trade data to catch the market’s attention, although it was low impact news.

    The UK goods trade deficit narrowed more than expected in March thanks to a rise in exports but the quarterly figure hit an 8-year high. The trade gap widened to 13.273 billion pounds in the first three months of the year from 12.205 billion pounds in the fourth quarter of 2015. Month-on-month, the March deficit shrank more than expected to 11.2 billion pounds from a revised 11.4 billion in February.

    Sterling rose against the dollar after the data to a reach a session high of $1.4465 from a session low of $1.4398. The pair traded within a 50-point range since the data.

    The euro was capped at the key $1.1400 level and turned lower after testing this area. A session low of $1.1357 was reached. Economic data out of the Eurozone had no impact on the single currency. There was weaker-than-expected industrial output for Germany, France and Italy in March.

    The absence of top tier economic data led the markets to be driven by sentiment, which consequently resulted in money moving out of safe havens like the yen, as risk appetite improved today following satisfactory CPI data out of China. The Japanese currency was down 0.6% versus the US dollar on the day so far. Today’s comments from Japan’s Finance Minister Taro Aso reiterating the Bank of Japan’s willingness and ability to intervene in the markets kept the yen from appreciating further.

    The dollar/yen pair breached the key 108 yen level on Monday and extended higher for second consecutive day to reach a peak of 109.26 yen in European trading today, the highest level of the month so far.

    In terms of US data out today, the JOLTS report on job openings for March showed an increase of 149,000 positions to a total of 5.757 million compared to 5.445 million in February. Expectations were for 5.431 million job openings.

    Oil futures moved off a low of $40.02 to rise to as high as $44.36. A report on weekly crude inventories by API is due later today and will likely have an impact on oil prices.

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