Morning Market Update – Greenback in Trouble

So Far

The US dollar seems to be in trouble for the day as the United States Total Net TIC Flows dropped down from a previous score of $110.4B to $19.3B in February. However, the United States Net Long-Term TIC Flows rose to $53.4B in February from a previous score of $6.3B.

Fed’s Vice Chairman Stanley Fischer crossed the Reuters on Monday and spoke on monetary policy. He mentioned that reducing the balance sheet is in effect to tighten the monetary policy. He also stated that despite the low liquidity in the markets, it will not be a concern for the balance sheet and will not impact monetary policy.

The People’s Bank of China (PBOC) set the Yuan reference rate at 6.8849 versus yesterday’s fix of 6.8785. China’s House Price Index dropped to 11.3% in March from a previous score of 11.8%.

The recent RBA meeting revealed that the interest rates continued to remain at 1.5%. This shows that the labor market has become weaker than expected. The RBA minutes notes: “In considering the stance of monetary policy, members noted that recent data had provided more confidence that global growth was rising and that the pick-up was broadly based across both developed and emerging economies.”

Coming Up

Moving on for the day, we have the Housing Starts released by the US Census Bureau which has been showing a slight growth with past data releases. We should have a close watch over the Housing Starts (MoM) data release and we hope the results to be positive for them this time as well. The major worry for the Dollar seems to be the Building Permits Change as they posted a negative 6.2% growth last time. We are looking forward for some recovery on the permit front.

Building Permits (MoM) are already looking better than the consensus at 1.25M when compared to the previous results which were seen at 1.213M. The Capacity Utilization released by the Federal Reserve Board looks better and is forecasted at 76.2% when compared to the previous data result at 75.4%. The Industrial Production released by the Board of Governors of the Federal Reserve shows a positive sign at 0.5% when compared to the previous data result which was seen at zero. We end the day with the upcoming French election which enters its final round.