Preliminary readings of PMIs across the European economies were quite solid justifying the ongoing upturn in economic growth. A key takeaway from today’s releases is the fact that the rosier economic backdrop in the Eurozone could ensure more conviction for the ECB in terms of a reduction of the bond buying program. Probably for that reason the euro has been the strongest currency thus far. It’s worth mentioning that at the time of writing the EURUSD is eyeing 1.18.
Along with the higher euro, the German DAX (DE30 on xStation5) is losing ground mainly owing to an adverse impact coming from the ex-change rate towards profitability of companies listed on the DE30 (most of them take advantage of the weaker currency via exporting their goods abroad). When it comes to the DE30 on its own, the index has faced a crucial resistance which has yet to be broken.
We wrote about an outstanding rally seen on Ripple yesterday which was yet extended to some extent. However, after striking $0.295 the price has retreated slightly which could be a first sign of fatigue. Albeit, there is no doubt that the Singaporean story could provide a more long-lived boost for that digital currency. This is especially true if Singapore begins implementing some facilities to make e-payment more convenient to inhabitants.
Getting back to the Asian session, the New Zealand dollar was the poorest currency taking into account all ones within the G10 basket. It stemmed from the fact that the Treasury revised down its forecasts as for GDP and budget surpluses in the oncoming years. Sure a combination of 3.5% GDP growth and a budget SURPLUS when many countries face big holes in their public finances could still be a reason for envy but expectations for the kiwi had been high. The scheme keeps on currently as well (NZD is down 0.6% against the greenback) as NY traders are preparing themselves to enter the day.
The economic calendar is packed with many significant releases. We are going to have several notable readings for the US dollar in particular and the data on oil inventories. At the end of the day, FED’s Kaplan is scheduled to speak as well so the greenback could be quite volatile today.