Although, US NAHB Housing Market Index, published on Monday, tested September 2014 highs, negative readings of Empire State Manufacturing Index and Industrial Production pulled back the US Dollar Index to register a negative daily closing. At the European front, testimony by the ECB President revealed the dire emergency on the part of the Greece to agree with its international creditors during Wednesday’s meeting to save its position into the Euro-region, pushing down the regional currency. Today, Euro-zone finance ministry officials are due to hold a Greece call ahead of a meeting of ministers later this week. The BoJ Governor, in a publics speech yesterday, said his comments last week, favoring the stronger Yen, wasn’t seemed to strengthen the national currency and he still favors the further weakness into the Yen prices. His comments during the last week was perceived as a hint to halt the BoJ’s easing bias; however, with the current statement, it becomes unlikely that the BoJ, in its meeting scheduled for Friday, could stay away from the loose monetary policy.
Early today, minutes from the recent RBA meeting revealed that the central bank continue supporting lose monetary policy even after cutting the benchmark interest rate twice into the current year as the measures couldn’t gain required benefits with the commodity prices pulling down the AUD and Chinese pessimism continue hurting the economic outlook for the export driven economy.
For the rest of the day, UK CPI, ZEW Economic Indices for EU & GE together with the housing market details from US are likely to take the center stage of the market; however, communications from Greek talks will continue driving the Euro. Should there be any confirmation for the Greek bailout funds, the regional currency is likely to rally.
Given the inability of the greenback to rally, coupled with weaker economics, there are likely chances that the USD may correct further before registering a bounce on FOMC. Hence, it would be into the best interest of the market players to stay alert before buying the USD.