Anglo Forex: Dollar Pares Gains

The U.S. dollar pared gains against the yen on Monday after Federal Reserve Chair Janet Yellen struck a dovish tone on the economic outlook, while disappointing U.S. manufacturing data also weighed on the market.

Yellen’s comments came at the Development conference in Chicago, where she said that “considerable slack” still remained in the labor market and reiterated that the Fed’s commitment to economic stimulus will still be needed for some time.

While today’s data showed that manufacturing activity in the Chicago region expanded at a slower rate than forecast in March, as new orders fell.

The Chicago purchasing managers’ index fell 55.9 from 59.8 in February. Analysts had expected the index to tick down to 59.0.

During the U.S. session the dollar backed off more than a two-week high against the yen, with USD/JPY closing up 0.35% at 1.0320, down from a high of 1.0344 earlier.

In Europe the single currency had a topsy turvy session, weakening in the morning after preliminary data showed that the annual rate of inflation in the euro zone fell to the lowest level since November 2009 in March.

The shock drop raises expectations the European Central Bank will take radical action to stop the threat of deflation in the currency bloc at its upcoming policy meeting on Thursday.

However, some investors expect the ECB to leave monetary policy on hold on Thursday, after Bundesbank head Jens Weidmann said Saturday that the euro zone is not in a deflationary cycle, and that the slowdown was due in large part to temporary factors, such as falls in food and energy prices.

The euro recovered later in the session, after Fed Chair Yellen’s dovish comments about the U.S. economy. EUR/USD ended the session up 0.16% at 1.3775, up from a low of 1.3724.

In the U.K. the pound took advantage of this mornings Chicago PMI miss, climbing to more than two-week high against the dollar. With GBP/USD closing up 0.22% to 1.6676.

Elsewhere, the New Zealand dollar gained on the U.S. dollar after Yellen’s dovish comments, despite data showing that the ANZ business confidence index for New Zealand slipped to 67.3 in March, from a reading of 70.8 the previous month.

NZD/USD ended the session up 0.18% to 0.8672.

While the Australian dollar remained close to a four month high against the greenback, with AUD/USD climbing 0.25% to 0.9271.

Finally, the Canadian dollar strengthened after official data showed that Canada’s economy expanded 0.5% in January, ahead of expectations for growth of 0.4%.

On a year-over-year basis, Canada’s economy expanded 2.5% in January, following growth of 2.4% in the preceding month.

USD/CAD ended the session down 0.11% at 1.1048.

Forex - Australian dollar mostly flat ahead of Jan retail, trade data

The U.S. dollar pared gains against the yen on Wednesday, following the release of disappointing U.S. private sector payrolls data.

This mornings ADP nonfarm payrolls data showed that the U.S. private sector added 139,000 jobs in February, well below expectations for an increase of 160,000.

And there was more bad news later on when the Institute of Supply Management said its non-manufacturing purchasing manager’s index fell to a 43-month low of 51.6 last month from 54.0 in January. Confounding expectations for a fall to 53.5 in February.

The data caused the dollar to give-up ground against the Japanese yen which suffered in risk-off trading after tensions eased in the standoff between Ukraine and Russia.

USD/JPY ended the session up 0.10% at 102.32, down from a high of 102.55 earlier.

While the euro trimmed losses against the dollar after this mornings data. The single currency couldn’t find any friends this morning, despite data showing that euro zone private sector activity grew more rapidly than initially estimated in February, expanding at the fastest pace since June 2011.

Investors remain wary of this weeks European Central Bank’s meeting on Thursday amid concerns that the bank could tighten monetary policy.

EUR/USD ended the session down 0.03% at 1.3738, up from a low of 1.3707 earlier.

The pound also found support this morning after official data showed that activity in the U.K. service sector dipped in February, but growth remained robust.

GBP/USD ended the session up 0.40% at 1.6731.

Elsewhere, the U.S. dollar fell against the Canadian dollar after the Bank of Canada left rates on hold at 1.00% on Wednesday, a decision that was widely anticipated.

The bank said economic growth in the fourth quarter of 2013 was slightly stronger than anticipated, adding that it still expects growth of 2.5% in 2014.

However, the bank also said inflation is expected to remain well below target for some time and the direction of the next change to the policy rate will be data dependent.

USD/CAD closed the session down 0.45% at 1.1042.

And the Australian dollar moved higher, despite the Reserve Bank of Australia indicating the Aussie needs to keep falling if the economic recovery is to take hold.

AUD/USD climbed 0.39% to 0.8987.

Finally, the New Zealand dollar moved higher against the greenback as concerns about the crisis in Ukraine ease.

NZD/USD climbed 0.35% to 0.8419.

S. dollar pared gains against the yen on Wednesday, following the release of disappointing U.S. private sector payrolls data.

This mornings ADP nonfarm payrolls data showed that the U.S. private sector added 139,000 jobs in February, well below expectations for an increase of 160,000.

And there was more bad news later on when the Institute of Supply Management said its non-manufacturing purchasing manager’s index fell to a 43-month low of 51.6 last month from 54.0 in January. Confounding expectations for a fall to 53.5 in February.

The data caused the dollar to give-up ground against the Japanese yen which suffered in risk-off trading after tensions eased in the standoff between Ukraine and Russia.

USD/JPY ended the session up 0.10% at 102.32, down from a high of 102.55 earlier.

While the euro trimmed losses against the dollar after this mornings data. The single currency couldn’t find any friends this morning, despite data showing that euro zone private sector activity grew more rapidly than initially estimated in February, expanding at the fastest pace since June 2011.

Investors remain wary of this weeks European Central Bank’s meeting on Thursday amid concerns that the bank could tighten monetary policy.

EUR/USD ended the session down 0.03% at 1.3738, up from a low of 1.3707 earlier.

The pound also found support this morning after official data showed that activity in the U.K. service sector dipped in February, but growth remained robust.

GBP/USD ended the session up 0.40% at 1.6731.

Elsewhere, the U.S. dollar fell against the Canadian dollar after the Bank of Canada left rates on hold at 1.00% on Wednesday, a decision that was widely anticipated.

The bank said economic growth in the fourth quarter of 2013 was slightly stronger than anticipated, adding that it still expects growth of 2.5% in 2014.

However, the bank also said inflation is expected to remain well below target for some time and the direction of the next change to the policy rate will be data dependent.

USD/CAD closed the session down 0.45% at 1.1042.

And the Australian dollar moved higher, despite the Reserve Bank of Australia indicating the Aussie needs to keep falling if the economic recovery is to take hold.

AUD/USD climbed 0.39% to 0.8987.

Finally, the New Zealand dollar moved higher against the greenback as concerns about the crisis in Ukraine ease.

NZD/USD climbed 0.35% to 0.8419.

- See more at: http://www.forexnews.com/blog/2014/03/05/dollar-pares-gains-vs-yen-payrolls-data-disappoints-top-forex-news/#sthash.COgL1xdy.dpuferfkjerfkjnerfkerjrkjkjrkrkjrkjerkjrekjerkjer

The U.S. dollar pared gains against the yen on Wednesday, following the release of disappointing U.S. private sector payrolls data.