US Dollar May Retreat as ADP, ISM Data Wighs on Fed Policy Outlook –

Talking Points:

  • US Dollar May Fall as ADP, ISM Data Undermines Fed Outlook
  • NZ FinMin English Comments Send Kiwi Dollar Lower Overnight
  • Access Real-Time FX Markets Analysis with DailyFX on Demand

The US Dollar continued to advance higher in overnight trade, with prices on pace to deliver a fifth consecutive day on the upside. The move tracked a pickup in front-end US Treasury bond yields, pointing to firming monetary policy expectations as the catalyst. From here, Fed policy speculation will be informed by the March editions of the ADP Employment report and the ISM Manufacturing reading in the hours ahead. The former is due to show private-sector hiring accelerated compared with the prior month while the latter reflects a slight slow-down in factory-sector activity growth.

US economic news-flow has increasingly underperformed relative to consensus forecasts since late December. This warns that analysts may be over-estimating the vigor of the world’s largest economy, opening the door for downside surprises. Soft outcomes may push out investors’ baseline scenario for when the rate-setting FOMC committee begins raising interest rates, undermining support for the greenback and sending it downward. As it stands, Fed Funds futures price in the first post-QE increase in target range for the baseline lending rate in October.

The New Zealand Dollar underperformed, falling as much as 0.8 percent on average against its leading counterparts. The move lower followed comments from New Zealand Finance Minister Bill English, who said the Kiwi’s strength represents a challenge for exporters and dismissed the prospect of its parity with the Aussie, saying he will “believe it when he sees it”. It is unclear why the markets assigned such significance to relatively vague commentary seemingly devoid of actual policy guidance.


Asia Session

European Session

Critical Levels

— Written by Ilya Spivak, Currency Strategist for

To receive Ilya’s analysis directly via email, please SIGN UP HERE

Contact and follow Ilya on Twitter: @IlyaSpivak

original source

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.

You may also like...

Rules of Discussion on US Dollar May Retreat as ADP, ISM Data Wighs on Fed Policy Outlook

1. This forum is for discussion of financial markets. Please respect others view even if they are contrary to you.
2. Member's comments should lead to value addition in forum discussion.
3. If anyone is found making repetitive Explicit/Abusive/Racial comments, his account shall be banned and old posts will be deleted.
4. Providing Advice/Recommendations/Tips is fine but it should be free. Members cannot ask to be paid for it. Paid Advice is strictly prohibited
5. Spam links are not allowed. Too much promotion or using Contact info in ID will lead to account ban.
IMP : Members are requested to flag any violations to keep Forum Clean.
Loading comments …