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Dollar domination and a bit of risk aversion pushed higher-yielding currencies lower at the start of the Asian session, but profit-taking soon ensued as forex traders brace for France’s Presidential elections this weekend.

  • NZ ANZ consumer confidence dips further from -1.7% to -2.8% in April
  • Japan’s flash manufacturing PMI improves from 52.4 to 52.8 in April
  • Japan’s tertiary industry activity up by 0.2% vs. 0.3% expected, -0.2% previous

Major Events:

Japan’s economic releases – The week got a little brighter for Japanese equities traders after the world’s third largest economy printed somewhat positive economic reports.

Japan’s flash manufacturing PMI clocked in at 52.8 in April, which is better than March’s 52.4 reading. What’s more, details show that higher external demand and price pressures are motivating companies to add workforces at a pace that matches January’s 34-month peak.

Meanwhile, a tertiary industry activity report showed a 0.2% uptick for the month of February, which is a welcome sight after January’s 0.2% decline.

The reports, together with Kuroda regularly saying that he and his gang are sticking to their yield curve control program, boosted Nikkei 0.73% higher by the end of the mid-day session.

All eyes on France’s Presidential elections – The major currencies started the session by extending economic themes from the previous sessions, with dollar domination and risk aversion from a terrorist attack in Paris boosting “safe havens” like the dollar and the yen.

But profit-taking soon ensued, likely due to traders taking their trades off ahead of France’s Presidential elections this weekend.

See, Macron might be ahead of LePen in the latest polls, but traders have learned to be wary of polls after they’ve epically (is it a word?) failed to predict the outcome of the EU referendum and the U.S. Presidential elections.

Market Movers:

JPY – The yen took advantage of the overall risk aversion and gained a bit more against its counterparts.

USD/JPY slipped by 10 pips (-0.09%) to 109.24, EUR/JPY also dipped by 10 pips (-0.09%) to 117.07, and GBP/JPY dropped by 29 pips (-0.21%) to 139.80.

Other currencies also bowed down to the Kiwi with EUR/NZD falling by 73 pips (-0.48%) to 1.5235, GBP/NZD dropping by 87 pips (-0.48%) to 1.8178, AUD/NZD sliding by 40 pips (-0.37%) to 1.0667, and NZD/CAD shooting up by 47 pips (+0.50%) to .9484.

Comdolls – Commodity-related currencies started the trading session on a weak note, but soon recovered on the back of profit-taking.

AUD/USD fell to a low of .7515 before recovering to .7528, NZD/USD dipped to .6989 before rising back up to .7000, and USD/CAD hit a high of 1.3482 before falling back down to 1.3480.

Watch Out For:

  • 7:00 am GMT: French flash manufacturing PMI (53.2 expected, 53.3 previous)
  • 7:00 am GMT: French flash services PMI (57.2 expected, 57.5 previous)
  • 7:30 am GMT: German flash manufacturing PMI (58.1 expected, 58.3 previous)
  • 7:30 am GMT: German flash services PMI (55.5 expected, 55.6 previous)
  • 8:00 am GMT: Euro Zone flash manufacturing PMI (56.1 expected, 56.2 previous)
  • 8:00 am GMT: Euro Zone flash services PMI expected to remain at 56.0
  • 8:00 am GMT: Euro Zone current account (26.3B EUR expected, 24.1B EUR previous)
  • 8:30 am GMT: U.K. retail sales (-0.3% expected, 1.4% previous)