By ForexMansion.com
European currencies remained strong, with the last leg up to the euro followed the strong results of Spain’s bond auction, with the bid-to-cover rising to 1.81 from 1.54 in February. Spanish sovereign debt yields were higher, in line with the broad moves in euro-zone countries. The euro was able to hold the 1.40 region, as market participants continue to believe the ECB will raise interest rates at their next meeting.
Tomorrow’s German Producer Prices (700 GMT) and EU Trade Balance (10:00 GMT), will act as a catalyst for further market movement. A greater than expected CPI number is likely to draw capital toward the Euro.
India’s RBI raised its benchmark rate to 6.75%, while the SNB remained on hold. In the wake of the MENA conflicts and the escalating crisis in Japan, the Swiss franc is amongst one of the top performers in the G10 and remained strong today.
In the US, CPI last month increased by 0.5% from January, according to the Labor Department. That followed increases of 0.4% the previous two months. Over the last 12 months, prices were up 2.1% in February. Economists had expected consumer prices to rise by 0.5% in February and the core consumer price index to gain 0.1%.
On a positive note, jobless claims fell by 16,000 to 385,000 in the week ended March 12, according to the Labor Department. The prior week’s figures were revised up slightly, to 401,000 from an original estimate of 397,000. Economists surveyed had forecast claims would fall by only 9,000 in the week ending March 5.
The four-week moving average of new claims, fell 7,000 to 386,250 in the week ending March 12. It was the lowest level since July 2008.
In manufacturing the US Philly Fed Survey was very strong. The 43.3 reading compares to a 35.9 in February and expectations of a 29.4 index number.
