European session:

The dollar strengthened before data forecast to show growing U.S. consumer spending after Federal Reserve official James Bullard said the central bank may scale back its monetary stimulus.
“The economy is looking pretty good,” Bullard told reporters in Marseille, France. “It is still reasonable to review QE2 in the coming meetings, especially this April meeting, and see if we want to decide to finish the program or to stop a little bit short,” he said, referring to the second round of so-called quantitative easing, due to end in June.
Atlanta Fed President Dennis Lockhart and Chicago Fed President Charles Evans both speak today.
The yen weakened versus most of its major counterparts on signs the global recovery is gaining momentum, boosting appetite for higher-yielding investments. Policy makers should review whether to curtail plans to buy $600 billion in Treasuries because of strong economic data, St. Louis Fed President Bullard said on March 26. The euro depreciated for a second day against the dollar after German Chancellor Angela Merkel’s coalition was defeated in a regional election. Australia’s dollar advanced to its highest level since 1983.
“Commentators from the Fed have been hawkish,” said Hans- Guenter Redeker, global head of foreign-exchange strategy at BNP Paribas SA in London. Prospects for “higher U.S. rates and yields” are supporting the dollar, he said.

US events start at 1230GMT, when personal income is expected to rise 0.4% in February, as payrolls posted a solid increase, but hourly earnings were flat and the average workweek was unchanged from January. PCE is forecast to rise 0.6%, as retail sales were up 1.0% and nonauto retail sales rose 0.7%. The core PCE price index is expected to rise 0.2%. US data continues at 1330GMT with the weekly MNI Capital Goods  Index, followed at 1400GMT by Pending Home Sales for February.