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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Dollar Begins Week Softer

NEW YORK (BBH FX Strategy) -- The U.S. dollar is marginally softer as North American players return to their posts.

The better-than-expected official Chinese manufacturing purchasing managers' index (53.1 from 51.0 in February and consensus for 50.5) saw steeper losses in the greenback. The disappointing eurozone manufacturing PMI however (47.7 same as the flash but weak details) helped cap the euro in front of last week's highs, ahead of 1.34, and weighed on European equities.

The UK Chartered Institute of Purchasing and Supply survey of manufacturing surprised on the upside (52.1 vs 50.7 consensus) and sterling extended recent gains, though we suspect it will struggle to extend those gains in North America Monday.

Japan's Tankan Survey disappointed, showing no improvement from the December report (large manufacturers diffusion index -4), with softer capex plans (1.0% vs 1.4% in December) and expectations of a firmer yen (JPY78.14 vs JPY79.02 in the December survey).

Follow TheStreet on Twitter and become a fan on Facebook.

There are several policy implications from the recent data reports. First, the rise in China's official PMI supports the idea of a soft landing in the world's second-largest economy. This would seem to reduce the urgency of easier monetary policy.

Second, it also has knock-on effects for the outlook of Tuesday's Reserve Bank of Australia meeting. Speculation seen last week for a cut has been largely, even if not wholly, reversed. Of the central banks that meet this week (RBA, Bank of England and European Central Bank), Australia still is the most likely to surprise, although we now expect it to wait a bit longer to move.

The Bank of England will leave its rate and asset purchase program unchanged. The ECB is in a more difficult position. March was the eighth consecutive month of a sub-50 PMI reading. Moreover, the forward-looking new orders component gives no hope for optimism of stability. It stands at 45.4 from 45.6 in the flash report and down from 47.3 in February.

The eurozone also reported another increase in the unemployment rate -- 10.8% in February from 10.6% at the end of last year and 10.0% in February 2011. Yet interest rates are not the main obstacle to growth. Instead, austerity and deleveraging are the main culprits. Ironically, in the current environment, weaker growth will force some countries to increase their austerity efforts or overshoot their fiscal targets.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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.
Submit an article to us!
DOW 16,979.13 +59.54 0.35%
S&P 500 1,986.51 +4.91 0.25%
NASDAQ 4,526.4820 -1.0320 -0.02%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs