NEWS / Foreign Exchange

The U.S. dollar fell broadly after US data on housing and consumer confidence

The U.S. dollar fell broadly after US data on housing and consumer confidence came in lower than expected.  Sales of existing homes in the United States slumped 8.4% in March and existing home prices fell for the 8th consecutive time, with the national median home price down 0.3 % from a year ago to $217,000.  US consumer confidence fell to 104.0 in April from 108.2 in March, due to higher gasoline prices and inflationary woes rising to their highest since August 2006. 

The Euro rose against the US dollar and yen owing to weaker US economic numbers, which reinforced the view that the US economy is slowing while other parts of the world are picking up.  Look for the euro to remain strong ahead of Thursday??™s ECB meeting where the euro-zone??™s interest rates are steadily catching up to the US. 
       
The British pound rallied versus the dollar after testimony from the Bank of England??™s Monetary Policy Committee firmed up expectations of higher interest rates.  The market is full pricing in further monetary tightening in England to 5.75% by the end of the year.

The Japanese yen remained firm as investors scaled back carry trade positions, after below-consensus Australian inflation data sparked a general trimming of high-yielders.
   
The Canadian dollar gave back early gains versus the greenback as the Bank of Canada??™s interest-rate statement was not as hawkish as expected.  The Canadian central bank left its overnight interest rate at 4.25% and noted although inflationary pressures remain strong, the Bank of Canada did not signal that rate hikes may be needed.
   
The Australian dollar had its largest one-day percentage fall in seven weeks after benign first-quarter inflation data slashed expectations the central bank would raise interest rates later this year. 
   
The Mexican peso and stocks weakened ahead of an inflation report that will offer clues on the future course of central bank monetary policy. 

Indicative Rates: