The final day of the first quarter 2014 sees a little risk appetite returning to the indices although for currencies no real discernible trend has emerged overnight or so far this morning. Whilst indices might be ticking higher in their usual end of quarter window dressing, FX markets seem to have shut up shop for Q1.
With little in the way of news flow over the week end this doesn’t come as much of a surprise but it shouldn’t be long before we see some action. This morning sees Eurozone inflation released which will be closely watched to see whether the deflationary concerns that are hounding the ECB are augmenting. CPI is due to fall from 0.7% to 0.6% and with some recent downward pressure being applied to the single currency it’s hard to see any near-term upside for the euro, unless the figure surprises to the upside.
The Aussie will also be in focus as the RBA announces interest rates overnight. AUDUSD has risen over 3% since the RBA’s last meeting, now firmly back above the 0.9000 level and even looked like it was going to clear 0.9300 last Friday. Governor Glenn Stevens has changed his rhetoric towards the dollar from a far less dovish stance and any further evidence of indifference towards the strength could underpin the Aussie further.