The dollar strengthened regaining ground against its peers today on the back of a reduction in global growth expectations by the International Monetary Fund for the 4th time in a row within the past year which underpinned demand for safer assets. The IMF lowered its global growth forecast in January from 3.4% to 3.2% in April. The IMF added that weakening currencies and deteriorating geopolitical disputes could become more problematic amid weaker global growth. However the dollar maintained pressure to the downside following less than hawkish remarks from Federal Reserve Chair Janet Yellen which encouraged investors to delay predictions on when the next rate hike would occur. Data revealed that US import prices climbed 0.2% in March compounding forecasts for a rise of 1.0% following a 0.4% decline in February. The US dollar index was up 0.34% trading at 94.29 off its 8 month low of 93.62 reached earlier in the session.
The euro weakened against the dollar with the pair down 0.16% trading at 1.1390 off its session low of 1.1344 after having come off 6 month highs of 1.1464 reached earlier in the day. The euro had bounced to the upside as the dollar trimmed gains across the board to then come under a lot of pressure during the New York session. Germany released its final CPI readings for March which were in line with initial readings which as a result did not affect the pair. German inflation was up 0.3% on a year over year basis while up by 0.8% on a monthly basis.
The pound strengthened against the dollar with the pair up 0.18% trading at 1.4266 off its session low of 1.4194 after having come off its session high of 1.4347 reached earlier in the day. The pound had climbed to 1 week highs against the dollar following the release of UK inflation data which was better than forecast as the greenback retained its downside pressure. The UK Office for National Statistics reported that consumer price inflation was up by 0.5% in March while analysts expected a rise of 0.4% following a 0.3% increase in February. Core CPI climbed at a rate of 1.5% in March beating expectations for a rise of 1.3% following an increase of 1.2% in February. The UK house price index gained 7.6% in March compounding expectations for an increase of 8.1% after a rise of 7.9% in February.
The yen weakened against the dollar with the pair up 0.59% trading at 108.58 off its session high of 108.78 after having come off its session low of 107.87 reached earlier in the day. The pair came off its 17 month low of 107.65 reached in the previous session as the yen appears to be underperforming all of the G10 currencies in an environment of modest risk appetite. The yen has strengthened for 7 trading days in a row against the dollar highlighting a one-sided nature of its price action. As the Bank of Japan appears to be ready to act to weaken its currency Japan may face international opposition to market intervention.
The Australian, New Zealand and Canadian dollars maintained their strength against the greenback as commodity associated currencies were underpinned as oil prices continued to advance in anticipation of a very significant meeting between key oil producers from Russia and the Middle East which will hopefully result in a production freeze. Crude oil was last up 4.44% trading at $44.15 per barrel. The Aussie dollar surged 1.21% against the greenback with the pair trading at session highs of 0.7687 after having come off its session low of 0.7583 reached earlier in the day. The kiwi dollar gained 0.86% against the greenback with the pair trading at 0.6918 off its session high of 0.6925 after having come off its session low of 0.6851 reached earlier in the day. The loonie rose 1.14% against the dollar with the pair trading at session lows of 1.2750 after having come off its session high of 1.2919 reached earlier in the day.
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