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Forex week in review: March 24-April 1

The month-end, quarter-end ‘fix mess’ is now over. Welcome to the beginning of the ‘carry’ month. Carry is king in April. Non-farm payrolls [1] did not bring forth ‘that’ surprise. The dollar has suffered whiplash this week on the back of Fed member jousting rhetoric. Minneapolis Fed President Kocherlakota’s comment that a hike of 75bp was possible in 2011 was negated by Friday’s dovish comments from New York’s Fed President Dudley, a close friend of Ben’s.

Ireland passing the stress tests [2] and being downgraded, like Portugal, has done little to stem the EUR’s rise. The stress test result and Portugal’s successful bond auction seem to further limit the prospects for a near-term systemic shock that could derail Trichet’s plan to hike rates next week. The market has priced this in and all we need now is for the ECB to deliver. A new ECB rate hiking cycle will usher in a new phase of general dollar weakness versus the European currencies.

EUROPE

Americas

ASIA

WEEK AHEAD

  • This week is dominated by Central Bank announcements, starting down-under with the RBA followed by BoJ, BoE and finishing with the ECB.
  • Bernanke gets some air time at the beginning of the week, ahead of the FOMC meeting minutes on Tuesday.
  • Canada gives us Ivey PMI and Building permits and employment changes
  • Australia will also focus on employment and the US its weekly claims

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell [8]

Vice-President of Market Analysis at MarketPulse [9]
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

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