This Day On The Street
Continue to site
ADVERTISEMENT
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

Dollar Remains Range-Bound

NEW YORK ( BBH FX Strategy) -- The U.S. dollar is trading within Monday's ranges against the major foreign currencies Tuesday. The main exception is the Australian dollar, where the central bank kept rates on hold, but encouraged the market to look for a rate cut next month.

The unwinding of long AUD cross positions helped lift the yen after the Bank of Japan reported the first decline in its monetary base in three years. The dollar fell to its lowest level against the yen in nearly a month, with reported purchases by Japanese importers helping to steady the greenback near JPY81.50. This, in turn, helped the other main yen crosses recover from earlier losses.

The yen's strength weighed on the local share prices and the Nikkei shed 0.6%. The inverse correlation (60-day rolling on percent change) stands at -0.35, which is the strongest inversion since late November 2010. There have only been a handful of times since 1990 that the inverse correlation has been greater than it is Tuesday. The regional benchmark, the MSCI Asia-Pacific Index, rose about 0.3%.

Follow TheStreet on Twitter and become a fan on Facebook.

News that China official nonmanufacturing purchasing managers' index rose to 58 after a sharp upward revision to the February series (from 48.4 to 57.3) helped the regional currencies. Chinese markets are closed through Wednesday, but the combination of the stronger official manufacturing and non-manufacturing PMIs should help boost confidence in the soft landing scenario.

The head of the National Development and Reform Commission indicated that Q1 GDP, which will be released in about 10 days, is likely to be near 8.4%. The consensus was for 8.3%.

The Reserve Bank of Australia left rates steady at 4.25%. Yet the better Chinese data and the disappointment to those that had expected a cut Tuesday did not spark rally in the Australian dollar. If anything, the RBA statement simply increases the market's anticipation for a rate cut next month. It will take an upside surprise to the consumer price index figure due April 24 to dash such expectations.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
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!
SYM TRADE IT LAST %CHG
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%
YHOO $44.52 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs