Key overnight events:
- Federal Reserve officials Williams and Lockhart said rate hikes may be warranted as soon as the Fed’s meeting next month in April, citing solid readings on the US economy despite headwinds from abroad; both are non-voters.
- Goldman Sachs is holding fast to its bullish-dollar stance, as it predicts 3 further rate hikes in 2016. The Bloomberg Dollar Spot Index climbed 0.3% overnight.
- The S&P 500 Index gained 0.1% during a quiet trading session yesterday. The Dow Jones Industrial Average rose 0.1% as well, capping its 7th consecutive day of gains and longest run since October.
- WTI front-month futures rose 1.2%, as both crude and Brent topped $41/bbl. Bloomberg reported that more oil producing nations were said to have received invites to the April meeting on output freeze.
- The Wall Street Journal reported that the IMF is said to be pressing China for more info on its FX operations as the PBOC turns to discreet methods such as derivatives in order to support the yuan.
- Spot 1.3621
- USDSGD continues its retracement from an 8-month low, reaching a high this morning of 1.3643. The next resistance above lies at 1.3728.
- Finance Minister Heng Swee Keat will deliver the budget for the next fiscal year on Thursday.
- Spot 0.7589
- AUDUSD pared gains back below 0.7600, though the currency pair should remain supported above the key 0.7380 level.
- RBA Governor Glen Stevens is due to make a speech in the afternoon; BNP Paribas sees some scope for Stevens to signal discomfort with currency gains and reaffirm his preference and expectation for renewed depreciation, in a note to clients dated Mar 22nd.
- Spot 1.3073
- USDCAD reached a high of 1.3103 this morning, resuming its pullback from the 2016-low of 1.2924 made on Friday.
- The medium-term trend is to the downside though, and the key level of 1.2832 could be tested soon, as traders look ahead to tomorrow’s federal budget.
- Spot 6.4929
- USDCNH rose as much as 0.5% to 6.4965 as the PBOC raised its reference rate for the second straight day.
- China will keep its currency broadly stable on needs of economic fundamentals and financial stability, Premier Li said during a meeting with the IMF’s Lagarde.
- Spot 8.4135
- Following rather dovish comments from Norges Bank Governor Olsen earlier this week, USDNOK pulled back above the 8.4000 handle and looks set to test the 200-day moving average of 8.4311.