Dollar closes the week sharply higher

  • Canadian March employment report +28.7K vs 0.0K expected
  • Canadian March housing starts 189.7K vs 175K expected
  • US March import prices -0.3% vs -0.3% expected
  • Goldman Sachs on how to trade Fed speeches
  • NIESR UK GDP estimate 0.6% for 3 months to March
  • Lacker saw "a pretty substantial amount" of support for June hike
  • US dollar bulls having second thoughts ahead of the weekend
  • A look into the experimental ideas of a deflationary future
  • Kocherlakota: Repeats that Fed should delay hike until H2 2016
  • The worst time for a US slowdown would be Q1
  • Oil prices higher after drop in US oil rigs
  • S&P affirms France at AA, outlook remains negative
  • S&P affirms Spain at BBB, outlook stable
  • The strongest and weakest currencies for the week ending April 10, 2014
  • Commitment of traders report for the week ending April 7, 2015
  • Global stock markets move higher in the week ending April 10, 2015

Technical Analysis

  • Forex technical analysis: Gold holds 100 day MA on rally
  • Forex technical analysis: USDCHF in that end of week trading mode
  • Forex technical analysis: EURUSD moves above the days midpoint
  • USD/CAD sinks to massive option at 1.26

The EUR was hit hard again today helped by an IMF report that showed central bankers were dumping euros in anticipation of losses tied to the increased stimulus/QE. This was thought to undermine the chances of the euro ever becoming a reserve currency. The EURUSD fell by 1.65% on the day and was down against all the major currency pairs. For the week, the EURUSD fell 3.35%.

In Canada they reported that the net change in jobs added 28.7K jobs. The unemployment rate stayed steady at 6.8% which was lower than the estimate of 6.9%. Although the job gains were larger than expected, they were all in part time employment (+56.8K). Full time jobs declined by -28.2K on the month. Despite the somewhat ambiguous report, the USDCAD fell back toward the closing level from yesterday's trade after moving higher in anticipation of a weaker report.

The GBPUSD was also under pressure today and traded at the lowest level going back to June 2010. In the process, the price fell below the 1.4600 level - reaching a low price of 1.4586 before rebounding and consolidating in the NY afternoon. For the week, the GBPUSD was able to break outside of an up and down range ( 1.4731 to 1.4993) that confined the pair since March 20. Industrial output came in weaker than expected today and election risks were contributors to the bearish bias.

The USDJPY started falling in European trading when BOJ deputy governor Nakaos said the a cut in the BOJs inflation forecast would not be enough to justify more monetary easing.

Feds Lacker and Kocherlakota balanced each other with their comments. Lacker said he saw a "pretty substantial amount of support for a June hike, while Kocherlakota would prefer to tighten in the 2H or 2016 (not 2015, but 2016). Lacker is taking over for retired Dallas Fed President Fisher as the boards hawk.

Next weeks highlights:

Tuesday: UK CPI, US Retail Sales. China GDP
Wednesday: ECB decision and press conference. BOC interest rate decision, Australian employment
Friday: UK Employment (watch average hourly earnings), Canada and US CPI

Have a great weekend. Thank you for your support.