Market Drivers Mar. 24, 2016

Dollar strength persists
UK Retail Sales slightly better
Nikkei -0.64% Dax -1.13%
Oil $39/bbl
Gold $1217/oz.

Europe and Asia:
GBP UK Retail Sales -0.2% vs. -1.0% eyed

North America:
USD Weekly Jobless Claims 08:30
USD Durable Goods 08:30

It’s been another good session for the dollar as the greenback gained across the board in Asian and mid morning European trade ahead of the Easter holiday weekend.

The weakness in commodities with both oil and gold dropping helped the buck to gain against the loonie and the Aussie, while cable continued to sink dropping below the 1.4100 barrier before finding some support.

In UK the econ data was mixed with Retail Sales a bit better while Mortgage Approvals missed their mark. The former printed at -0.4% vs. -0.7% eyed while the latter was 45.8K vs. 46.9K the month prior. Overall the decline in the Retail Sales was generally moderate indicating that the consumer is holding up well, but as with all UK recent data the broad trend shows a clear slowdown of economic activity and that suggests that growth in Q1 of this year will likely miss the target.

Cable continues to be pressured by these trends, but more importantly by the lingering concerns over the Brexit issue and any further dollar strength could send the pair to a test of the 1.4000 level.

In North America today the calendar only carries second tier data with Durable Goods and weekly jobless claims as the key events on the docket. USD/JPY has risen more than 50 points off the Asian session lows, but it continues to see resistance at the 113.00 level as yen repatriation for the fiscal year end is offsetting the broad dollar strength.

With global markets slowing ahead of the three day Easter holiday weekend, price action could remain contained for the rest of the day, but any positive US data could provide further fuel for the dollar rally, as traders revive speculation about a possible Fed rate hike before June.

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