Forex: Thursday's review
01.04.2011, 07:48

Forex: Thursday's review

The euro strengthened against the dollar and the yen after euro-region inflation unexpectedly accelerated in March, bolstering the case for the European Central Bank to raise interest rates next week.
Inflation in the 17-nation euro region quickened to 2.6% in March from 2.4% in February, European Union estimates showed today. That’s the fastest pace since October 2008, and exceeds the ECB’s 2% limit for a fourth month. Economists had forecast inflation to hold steady.
The 17-nation currency remained higher against most its major counterparts after Ireland announced that four of the country’s banks need to raise 24 billion euros ($34 billion) of additional capital. The dollar weakened as fewer Americans filed jobless benefits applications last week before the March employment report tomorrow.
The shared currency earlier pared gains against the greenback after Anglo Irish Bank Corp. Chief Executive Officer Mike Aynsley said he’s “not sure we’ll get details” of plans for a funding facility for Irish banks after results of the stress tests.

EUR/USD: the pair shown high in the field of $1,4230, however by the end of session returned back below a mark $1,4200.
GBP/USD: on results of yesterday's session the pair decreased in around $1,6040.
USD/JPY: the pair bargained within the limits of Y82,50-Y83,20.


European data for Friday includes the run of manufacturing PMIs for March, including the final readings fro France (0648GMT) and Germany (0653GMT) as well as the main EMU release (0658GMT) all of which are expected to confirm their preliminary releases. Further EMU data at 0900GMT is expected to see EMU unemployment remain at 9.9% for February. 
The main release comes at 1230GMT, when non-farm payrolls are expected to rise 192,000 in March following the weather-related movements in the previous two months, as indicators such as weekly jobless claims point to continued improvement. Private payrolls are seen up 195,000. The unemployment rate is forecast to stay at 8.9% after three straight declines. Hourly earnings are expected to post a 0.2% rise following the flat February reading and the 0.4% January gain.

US data continues at 1400GMT with the ISM data and also Construction Spending. The ISM manufacturing index is expected to rise slightly to a reading of 61.5 in March from 61.4 in February. Regional data already released suggest that the pace of growth accelerated. Construction spending is forecast to fall 0.3% in February after declines in the previous two months on sharp non-residential construction contraction. Weather continued to be a factor in the data
in February. In addition, housing starts fell sharply in February, a negative for residential construction in this report. 

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