Forex Close
USD has faced a considerable amount of selling pressure all day and is lower vs. all major currencies with the USD Index down 1% to 71.342. The muted Mar. CPI data and the better-than-expected Mar. Industrial Production were unable to reverse the negative USD bid tone. FED Fund futures are lower despite the tame CPI reading and the 11.9% drop in Mar. Housing Starts. Interest rate futures now show an 80% chance of 25bp cut on April 30.
Slightly higher-than-expected Mar. CPI data in the Eurozone confirmed recent inflation warnings from various ECB officials and helped fortify the ECB’s policy stance. These data should all but eliminate expectations for a near-term ECB rate cut and may push medium-term ECB rate cut expectations further into the future. EUR/USD, up 1% to 1.5946, touched a new record high at 1.5979 in the morning session.
USD/JPY, down 0.2% to 101.65, was unable to break into positive territory despite the rally in equities. USD/CHF is down 0.84% to 0.9978 and USD/CAD is down 1.7% to 1.0010. Cable is up 0.4% to 1.9704.