U.S. Session Recap – March 31, 2014

  • U.S. personal spending and income up by 0.3%
  • UoM consumer sentiment figure revised from 79.9 to 80.0
  • New Zealand building consents down by 1.7%
  • New Zealand ANZ business confidence declined from 70.8 to 67.3
  • Australia HIA new home sales up by 4.6%
  • Australia private sector credit posted 0.4% uptick
  • Japanese manufacturing PMI slipped from 55.5 to 53.9
  • Japanese preliminary industrial production down by 2.3%
  • Japan ready to implement sales tax increase this week

The U.S. dollar took a much needed break from its recent dive, as most traders booked profits off their positions last week. AUD/USD retreated from a high of 0.9296 while USD/JPY climbed close to the 103.00 major psychological level. Most major pairs also made weekend gaps, with the dollar getting an early lead against some of its currency counterparts.

Data from the U.S. economy came in mostly in line with expectations on Friday, as personal spending and income rose by 0.35% while the UoM consumer sentiment figure was revised to 80.0. Over the weekend, New Zealand reported a 1.7% decline in building consents for February while the previous month’s figure was downgraded to show an 8.6% drop. Data from Japan showed signs of weakness, with the manufacturing PMI falling from 55.5 to 53.9 and the industrial production report showing a 2.3% decline.

Earlier today, Australia reported a 4.6% increase in HIA new home sales and a 0.4% uptick in private sector credit, allowing AUD/USD to stay above the .9250 minor psychological support. New Zealand’s ANZ business confidence index slipped from 70.8 to 67.3 yet NZD/USD still managed to hold on to its recent gains.

Brace yourselves for potential volatility among yen pairs today and for the rest of the week, as Japan gears up to implement its first sales tax hike since 1997. Judging from the upside breakouts and gaps among yen pairs, it appears that traders are pricing in expectations of further stimulus from the BOJ to offset the potential economic drag from the sales tax increase.

See also:

London Session Recap

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