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Morning Brief 18.04.2017

18 April 2017

U.S dollar reversed its losses against the Japanese Yen on Monday trading after the comments of Treasure secretary with Financial Times that strong US dollar is good in long term periods. Dollar is recently up 0.3% against the Yen after hitting five month lowest level in earlier sessions.

On the economic front U.S consumer prices decline 0.3% in March versus the 0.0% expected as compared to 0.1% in February, retail sales fell 0.2% in March versus -0.1% as compared to -0.3% in February. According to New York Fed’s Empire state manufacturing survey, general business condition index is at 5.2 for April which is much lower than 15 expected as compared to 16.4 in March.

Dollar sharply fell after US president Donald Trump comments in an interview with the wall street Journal that “Too strong” dollar is hurting economy and made it difficult to compete with other countries in trade.

Investors are also sidelined ahead of French presidential election next week, where populist from the far left and far right loom larger than before. Geopolitical politics also affecting the investors decisions with escalating issues between USA and North Korea. A failed ballistic missile test by North Korea also prompted US officials to warn the country’s provocative behavior couldn’t continue. Further escalation should keep the U.S dollar under pressure, especially in scenario of relatively quiet economic calendar this week.

Australian dollar is down in today’s session on dovish comments by central bank and affirmation of need of strong US dollar by US treasury secretary. New Zealand also down but it is expected to rebound in a weak due to solid dairy prices and rising inflation.