This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration. Need a new registration confirmation email? Click here
NEW YORK (
BBH FX Strategy) -- The U.S. dollar is broadly firmer after weaker-than-expected data reports in China and the eurozone. The euro is erasing earlier gains and breaking below this week's previous lows around 1.313 after March's Purchasing Managers' Index composite disappointed expectations, even in Germany, with readings below the boom-bust level of 50.
Sterling is down after February retail sales also disappointed. The dollar is softer against the yen, with USD-JPY breaking below 83.0. Global stocks are mixed, with the
MSCI Asia up 0.4%. Despite the softer data, policy action gave some investors hope that China will ease policy further.
European stocks are faring much worse, down for the fourth day. The
EuroStoxx 600 is down 1.1% with bank shares down nearly 1.5%.
Portuguese yields are coming down for a second day, despite a general strike organized by unions as a protest against the government's austerity measures.
Oil prices are down today from soft data worldwide, which is the lone bright spot today since high oil remains a big risk to the global recovery.
The theme of the day is one of economic weakness. New Zealand GDP (0.3% quarter over quarter vs. 0.7% previously),
HSBC China PMI (48.1 vs. 49.6 previously), eurozone PMI composite (48.7 vs. 49.3 previously), and UK retail sales (-0.8% month over month vs. 0.6% previously, ex-auto fuel) all came in weaker than expected.
While some of these numbers can be volatile, the timing of the reports couldn't be worse given rising concerns in recent days about a China hard landing along with softer global growth. German manufacturing PMI was particularly weak, falling to 48.1 vs. an expected rise to 51.
Needless to say, the high beta currencies are taking it on the chin today while the dollar is largely firmer. Despite this week's corrective trade, most currencies remain within this month's trading ranges. Notable exceptions are AUD and ZAR, with the dollar today making new highs against them for March. The dollar seems likely to remain firm for now, but we need to see more trading ranges broken before declaring that the next leg of the dollar rally is upon us.
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.