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·         Dollar stuck near two-week lows amid lower U.S. yields

The U.S. dollar traded near more than two-week troughs versus major peers on Thursday, tracking Treasury yields lower, after minutes of the Federal Reserve’s March policy meeting offered no new catalysts to dictate market direction.

Fed officials remained cautious about the risks of the pandemic - even as the U.S. recovery gathered steam amid massive stimulus - and committed to pouring on monetary policy support until a rebound was more secure, the minutes showed Wednesday.

Fed Chair Jerome Powell will speak at a virtual International Monetary Fund conference later on Thursday.

The dollar index which measures the greenback against a basket of six currencies, edged lower to 92.371 in the Asian session, after dipping to as low as 92.134 on Wednesday for the first time since March 23.

The benchmark 10-year Treasury yield was around 1.67% on Thursday, after dipping below 1.63% overnight. It hit a more than one-year top of 1.776% late last month.

The retreat in U.S. yields has also removed a driver for dollar gains, he added.

The dollar weakened slightly to 109.66 yen, consolidating after its retreat from a more than one-year high of 110.97 reached on March 31.

The euro was almost unchanged from Wednesday at $1.18715, after rebounding from the almost five-month low of $1.1704 touched on March 31

 

·         EUR/USD holds steady above mid-1.1800s, upside seems limited ahead of Powell’s speech

The EUR/USD pair traded with a mild positive bias through the Asian session and was last seen hovering near the top end of its intraday range, around the 1.1870-75 region.

 

·         USD/JPY Forecast: Dips might still be seen as a buying opportunity, Powell’s speech in focus

USD/JPY witnessed some fresh selling on Thursday amid a subdued USD price action.

The risk-on mood, an uptick in the US bond yields should help limit any further losses.

Thursday’s key focus will remain on Fed Chair Jerome Powell’s scheduled speech.

 

Short-term technical outlook

 

From a technical perspective, the previous YTD tops, around the 109.35-30 region should protect the immediate downside. This is followed by the 109.00 mark, which if broken decisively might prompt some technical selling and drag the pair to the 108.45-35 horizontal support. Failure to defend the mentioned support levels will suggest that the pair has topped out in the near term and pave the way for a further near-term depreciating move.

On the flip side, the key 110.00 psychological mark now seems to have emerged as immediate resistance. Some follow-through buying has the potential to lift the pair towards an intermediate barrier near the 110.30-40 region en-route the recent daily closing highs, around the 110.70 area. A sustained breakthrough, leading to a subsequent move beyond the 111.00 mark will set the stage for the resumption of the pair’s well-established bullish trend witnessed since the beginning of 2021.

 

·         Federal Reserve Chair Powell is speaking on Thursday 08 April 2021

Fed's Powell is taking part in a panel discussion, a Q&A, on the global economy at the IMF Spring meeting begins at 1600 GMT  

 

Powell has been dovish over and over again in recent appearances. The Fed approach now is to base changes in policy on outcomes, not outlooks, and the outcome they are focused on right now is inflation sustainably, not transiently, above 2%.

 

·         Jamie Dimon says economic boom fueled by deficit spending, vaccines could ‘easily run into 2023’

Jamie Dimon is bullish on the U.S. economy – at least for the next few years.

In his annual shareholder letter, the long-time JPMorgan Chase chairman and CEO said he sees strong growth for the world’s biggest economy, thanks to the U.S. government’s response to the coronavirus pandemic that has left many consumers flush with savings.

“I have little doubt that with excess savings, new stimulus savings, huge deficit spending, more QE, a new potential infrastructure bill, a successful vaccine and euphoria around the end of the pandemic, the U.S. economy will likely boom,” Dimon said. “This boom could easily run into 2023 because all the spending could extend well into 2023.”

 

·         Infrastructure spending bill must address 21st century challenges, press secretary Psaki says

White House press secretary Jen Psaki on Wednesday pushed back against recent criticism toward President Joe Biden’s $2 trillion infrastructure package, noting this needs to go beyond getting “the horse and buggy across the road anymore.”

“He [Biden] believes that the way we view infrastructure should be through the prism of how we can address the challenges we’re facing today in America’s infrastructure,” Psaki said on CNBC’s “The News with Shepard Smith.”

 

·         Carnival says bookings are rising at record pace, could switch home ports if US rules are too restrictive

 

·         U.S. allotting 85% less J&J vaccines to states next week, data shows

 

·         ECB doesn’t want a premature spike in borrowing costs, Dutch governor says

European Central Bank Governing Council member Klaas Knot said Thursday he doesn’t want to see a premature run-up in government bond yields and that the ECB could take action to address this if needed.

 

·         German industrial orders rise on strong domestic demand in February

German industrial orders rose for the second month in a row in February driven by strong domestic demand, data showed on Thursday in a further sign that manufacturers are set to cushion a pandemic-related drop in overall output in the first quarter.

The data published by the Federal Statistics Offices showed orders for industrial goods increased on the month by 1.2% in seasonally adjusted terms. This was in line with a Reuters forecast.

The increase came after a downwardly revised rise of 0.8% in January.

 

·         Xi urges Germany, EU to cooperate with China to bring more certainty, stability to world

Chinese President Xi Jinping on Wednesday urged Germany and the European Union (EU) to make joint efforts with China to protect and promote the healthy and stable development of their cooperation, so as to bring more certainty and stability to the volatile world.

Xi made the remarks in a phone conversation with German Chancellor Angela Merkel.

 

·         Tokyo's Koike says will ask government for emergency measures to stem COVID-19 rise

Tokyo Governor Yuriko Koike said on Thursday she would request the central government impose emergency measures to stem a surge of COVID-19 infections in the capital region.

Koike made the comments after a meeting with medical experts who warned of an explosive surge in cases that could exceed the third and most deadly wave of the pandemic so far. Experts also warned of a rise in more infectious mutant strains of the virus.

 

·         South Korea weighs more virus curbs as daily infections surge

South Korea reported 700 new coronavirus cases on Thursday, its highest daily tally since early January, and the prime minister reiterated warnings that new social distancing rules would likely be needed.

 

·         India's record COVID-19 surge continues, vaccines run short

India reported a record 126,789 COVID-19 cases on Thursday as several states struggle to contain a second surge in infections, complaining of vaccine shortages and demanding inoculations be expanded to younger people.

 

·         New Zealand suspends entry for travellers from India due to high COVID-19 cases

New Zealand on Thursday temporarily suspended entry for all travellers from India, including its own citizens, for about two weeks following a high number of positive coronavirus cases arriving from the South Asian country

 

·         Australia says it will continue rollout of AstraZeneca Covid vaccine

·         Philippines suspends use of AstraZeneca vaccine for people under 60

Philippine health authorities suspended on Thursday the use of Astrazeneca’s COVID-19 vaccine for people below 60 years of age to investigate reports of blood clots coming from overseas.

 

·         Thailand eyes nightlife curbs to arrest third coronavirus wave

 

Thailand is considering closing entertainment venues in Bangkok and 40 provinces, its COVID-19 taskforce said on Thursday, as authorities rushed to tackle a new wave of coronavirus cases and the arrival of a highly contagious variant.

 

·         China sends more jets; Taiwan says it will fight to the end if there's war

 

·         Myanmar crisis sounds death knell for garment industry, jobs and hope

·         Myanmar embassy in London ‘stormed’ by military allies

Myanmar’s London embassy was ‘stormed’ last night and seized by allies of the military, who locked out the ambassador to the UK. Kyaw Zwar Minn, who was denied entry to the building on Charles Street in Mayfair, claimed there had been a ‘coup’ by the ‘Myanmar military’.

 

·         Oil falls after U.S. gasoline stocks surge against expectations

Crude prices fell on Thursday after official data showed a big increase in U.S. gasoline stocks, sparking concerns about demand weakening in the world’s biggest oil consumer as crude supplies around the world rise.

Brent crude fell 51 cents, or 0.8%, to $62.65 a barrel by 0648 GMT. U.S. oil fell 53 cents, or 0.9%, to $59.24 a barrel.

While crude oil stocks in the United States fell more than forecast by analysts, gasoline inventories jumped sharply, also against expectations, the U.S. Department of Energy said on Wednesday.

 

Reference: CNBC, Reuters, Metro.co.uk, Xinhua, Forexlive, FXStreet