Should we focus on the correlation between the euro and the U.S. dollar as the balance of power shifts?
30.03.2022
- Germany: Consumer Price Index (Preliminary)
- U.S. Core PCE Deflator
In the previous day’s trading, the U.S. dollar faced resistance due to falling yields on long-term U.S. Treasuries, causing the euro to surge against the dollar from 1.096 to 1.113. The U.S. March Consumer Confidence Index, released yesterday, came in at 107.2, exceeding the market forecast of 107.0 and marking the first increase in three months; however, the dollar’s upward momentum did not hold.
European currencies rose as ceasefire negotiations between Russia and Ukraine made progress, particularly after Russia announced it would "scale back military operations in the Ukrainian capital of Kyiv and the Chernihiv region." While the USD/JPY fell by about 2.3 yen, the EUR/JPY dropped by only 1.9 yen. The EUR/JPY is currently trading around 135.22 and is struggling to hold above the 20-period moving average on the 4-hour chart.
Today’s schedule includes the Swiss KOF Leading Index at 4:00 p.m. CET, remarks by ECB President Lagarde at 5:00 p.m. CET, remarks by BOE Deputy Governor Broadbent at 5:10 p.m. CET, the U.S. MBA Mortgage Applications Index at 8:00 p.m. CET, and—once U.S. trading hours begin—the German Consumer Price Index (flash estimate) at 9:00 p.m. CET,21:15: U.S. ADP National Employment Report; 21:30: U.S. Q4 GDP, U.S. Personal Consumption Expenditures, and U.S. Core PCE Deflator; 22:15: Remarks by U.S. Richmond Fed President Barkin; and 23:30: U.S. Weekly Crude Oil Inventories. We will be watching the strength and weakness of the rebounding euro and the retreating U.S. dollar.
Author: Keisuke Sakurai
