The biggest news yesterday turned out to be concerned about Johnson & Johnson vaccine and not the U.S inflation report. The country’s two health agencies (FDA and CDC) recommended halting the use of the one-shot vaccine after 6 cases of a rare but deadly blood clot disorder. Six cases is small when measured against the nearly 7 million Americans that have received the Johnson & Johnson vaccine but coming off the heels of similar concerns related to AstraZeneca’s shot, regulators are being very cautious as the disorder may appear up to 2 weeks from vaccination. Even if the FDA and CDC deem the vaccine safe after an investigation period, this revelation will increase vaccine skepticism/resistance, dealing a blow to the government’s accelerated vaccination plans. This is bad news for stocks, which ended the day lower, and the U.S. dollar which gave up earlier gains. U.S consumer prices rose 0.6 percent in the month of March with core prices rising 0.3 percent. While these increases were more than expected, investors worried about a much larger upside surprise. The more modest increase made it easier for everyone to heed the Federal Reserve’s guidance and look past the rise. Thursday’s retail sales report is the most important piece of U.S data on this week’s calendar. With a sharp increase in spending expected, the dollar’s decline may be limited. The Fed’s Beige Book report will also be released on Wednesday and optimism is widely anticipated. After the J&J news, the euro reversed its slide to end the day higher against the greenback. German investor confidence fell more than expected in April. Widespread lockdowns and slow vaccine rollout caused the country’s ZEW survey of investor sentiment to fall to 70.7 from 76.6. Not only was this the first drop since November but economists were looking for an increase. The Eurozone ZEW index also dropped from 74 to 66.3. Euro outperformed sterling because U.K GDP expanded less than expected in the month of February. The economy grew 0.4% against 0.6% forecast. Industrial production increased but the trade balance deteriorated significantly. Still, with the outlook brighter for the U.K than the Eurozone, we expect this outperformance to be short-lived. The Canadian and Australian dollars failed to rally despite higher oil prices. AUD was set back by weaker business confidence.
Euro
The single currency stood near three weeks high against the Greenback after a larger-than-expected uptick in a U.S consumer price gauge did not spark wider fears about accelerating inflation and the Federal Reserve's tapering. Still, many investors are wary of risk of further acceleration in the U.S economy as vaccination rollouts have moved fast. Overall, the EUR/USD traded with a low of 1.1865 and a high of 1.1918 before closing the day around 1.1899 in the New York session.
Yen
The Japanese Yen gained yesterday as the dollar fell as the U.S consumer price index jumped 0.6% in March versus the previous month, the largest gain since August 2012, and rose 2.6% from a year earlier, both 0.1 percentage point above market expectations. Inflation has been expected to accelerate in the April-June quarter. Overall, the USD/JPY traded with a low of 109.19 and a high of 109.94 before closing the day around 109.64 in the U.S session.
British Pound
The British Pound rose for a second day against the dollar and the euro yesterday, as analysts said Britain’s vaccination drive had not been derailed by its curbing of the use of AstraZeneca’s COVID-19 vaccine. The pound lost 1% against the dollar last week as Britain advised alternatives to the Oxford-AstraZeneca vaccine to vaccinate under-30s. Overall, the GBP/USD traded with a low of 1.3668 and a high of 1.3748 before closing the day at 1.3702 in the New York session.
Canadian Dollar
The Canadian Dollar was little changed against its U.S counterpart yesterday as oil rose and U.S data showed a tamer-than-expected increase in U.S underlying inflation, with the loonie rebounding from an earlier six-day low. Business sentiment in Canada continues to improve and many firms consider the impacts of the COVID-19 pandemic behind them. Overall, USD/CAD traded with a low of 1.2522 and a high of 1.2608 before closing the day at 1.2530 in the New York session.
Australian Dollar
The Australian Dollar has found itself undermined by vaccine rollout concerns in Australia and a mixed business confidence index from the country. National Australia Bank’s (NAB) Business Confidence edged down to 15 in March missing forecasts of 18. Despite the hawkish comments from the bank, Australia’s economic recovery seems to be dependent on the coronavirus vaccine rollout. Overall, AUD/USD traded with a low of 0.7584 and a high of 0.7646 before closing the day at 0.7638 in the New York session.
Euro-Yen
EUR/JPY is trading above 14, 50, and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is issuing a bearish stance. The Relative Strength Index is above 58 and lies above the neutral zone. In general, the pair has gained 0.25%.
Sterling-Yen
Currently, GBP/JPY is trading above 14, 50, and 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 46 reading and lies above the neutral zone. On the whole, the pair has gained 0.15%.
Aussie-Yen
Currently, the cross is trading above 14, 50, and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 50 reading and lies above the neutral region. In general, the pair has lost 0.09%.
Euro-Sterling
This cross is currently trading below 14, 50, and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 62 and lies below the neutral region. Overall, the pair has gained 0.12%.
Sterling-Swiss
This cross is trading below 14, 50, and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is also indicating a bullish tone. The Relative Strength Index is above 42 and lies above the neutral region. In general, the pair has lost 0.20%.
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
Disclaimer
This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.
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