The dollar continued in its recent bullish trend overnight with the Dollar Index hitting new fresh highs above 91.50, this was helped by the Euro taking another step to the downside as the ECB failed to talk of moves to normalisation and Mario Draghi said momentum had softened in the first quarter of the year. The EurUsd dropped over a big figure after the announcement and press conference. In the equities markets, strong results from the tech sector lifted the US equity markets with the Nasdaq finishing the day up 1.64%. The US 10Yr Treasuries dropped below 3% as it retraced slightly from its recent topside run but this did little to affect dollar strength.
With the dollar’s recent strong run, the weekend approaching, and a plethora of fresh tier 1 data due next week there is a strong possibility of some profit taking flow coming through the market in the next few sessions. This should provide better levels to buy the greenback in the coming week if the data points to the topside for the US economy and the current sentiment prevails.
Looking ahead to today’s trading and the main focus for the Asian session will be the latest BOJ meeting, with governor Kuroda expected to keep policy unchanged. The market will be looking for any subtle changes of rhetoric in the press conference, we have seen some pull back of bond purchasing recently and any indication that this could continue will be seen as the start of the path to normalization for the BOJ. Later in the day as we move into the London session we’re due to hear from SNB Chairman Thomas Jordan followed by the UK quarterly GDP figures. Into the New York session and the main focus will the US GDP data before we ease into the weekend.