- The dollar index is little changed as investors continue to mull over recent Fed speak attempting to calculate when the FOMC will be able to cut interest rates. Overnight the market reacted to comments from Masato Kanda, Japan’s top FX diplomat, who warned that appropriate steps would be taken to respond to excessive weakness of the Japanese yen without excluding any measures. Initially the market took this as a form of verbal intervention, pushing USDJPY lower, however this soon reversed as traders digested all the related headlines.
- Data released this morning showed that Germany’s Gfk consumer confidence index rose more than economists were expecting in April. The print rose to -27.4 (estimate -28.0) from a revised -28.8 in March. The release has done little to EURUSD, with the pair continuing to consolidate in the mid 1.08’s. Solid support remains around 1.08, with the pair currently capped at 1.0920 as markets await further euro area inflation data in the coming days.
- This afternoon the attention shifts to the US as we await the release of Durable Goods Orders and Consumer Confidence data. The Fed continues to ‘data watch’ and the confidence felt by consumers is a key metric of whether the US economy achieves a hard or soft landing. Consumers remain wary of ongoing labor market conditions with job creation continuing to be volatile despite layoff’s remaining low.
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