Positive US Data Helps USD

Positive US Data Helps USD
Tuesday, 3 Apr 2012
The US dollar saw gains vs. most of its riskier currency rivals as the combination of poor international fundamental news and positive US indicators caused investors to revert to the greenback. The EUR/USD, which last week saw significant upward momentum, tumbled below the 1.3300 level yesterday. At the same time, risk aversion among investors sent the dollar lower vs. the safe haven Japanese yen. The USD/JPY fell as low as 82.25 during the European session.

Turning to today, traders will want to pay attention to the US FOMC Meeting Minutes. Investors will be closely monitoring the meeting minutes for clues as to the current state of the US economic recovery. Positive signs of economic growth could help the dollar maintain its gains vs. the euro and recover its recent losses against the yen.

Later in the week, traders will want to keep an eye on a batch of significant US data, including tomorrow's ADP Non-Farm Employment Change figure. The ADP figure is considered a valid predictor of Friday's all important Non-Farm Employment Change figure on Friday. Analysts are predicting tomorrow's figure to come in at 209K, which if true could help the dollar going into the rest of the week.

EUR

EUR Tumbles vs. Main Currency Rivals

The euro tumbled throughout yesterday's trading session, as negative global data led to risk aversion in the marketplace. The EUR/JPY fell as low as 109.10, while the EUR/USD dropped below the 1.3300 level. Investors attributed the euro's bearishness to fears that the euro-zone could face a prolonged recession in the coming months. In addition, a generally positive outlook with regards to the US economic recovery has caused investors to revert their funds to the safe haven USD.

Turning to today, traders will want to monitor any announcements out of the euro-zone, especially with regards to the current state of the Portuguese economy. Portugal is widely seen as the country most in need of debt restructuring in the euro-zone. Any negative news is likely to weigh down on the euro. In addition, the US FOMC Meeting Minutes may generate market volatility for the common currency. Should the meeting minutes indicate continued economic growth in the US, the EUR/USD may continue to fall during today's session.