Wednesday in Asia, the US dollar slumped to multi-day lows against the euro and Swiss franc as a rise in most Asian stocks boosted investor’s risk appetite. The greenback tumbled to a 13-day low against the Swiss franc and a 2-day low against the euro.
Asian stock markets are mostly trading higher today with the overnight positive close on Wall Street and optimism about the global economy prompting investors to pick up stocks from across various sectors. Strong results and upbeat guidance from technology bellwether Intel Corp. too are contributing to the positive mood.
Further, Asian stocks made gains after Singapore’s central bank recentered its dollar policy band upwards and switched to a policy of modest and gradual appreciation for the currency.
Tuesday’s larger-than-expected US trade deficit data also prompted investors to debate the strength of the US economic recovery.
After unexpectedly shrinking in January, the U.S. trade deficit widened by even more than expected in February, according to a report released by the Commerce Department on Tuesday. The wider deficit came as the value imports increased at a much faster rate than the value of exports.
Intel Corp. (INTC) on Tuesday evening said that its first quarter profit jumped 288% from a year ago, as revenue surged and margins improved sharply amid growing worldwide demand for chips used in PCs and servers. The company’s quarterly earnings per share also came in above expectations as did its quarterly revenue.
Further, the company forecast second quarter revenue above analysts’ current consensus estimate and raised its gross margin outlook for the full year 2010.
The US dollar extended its 6-day losing streak against the Swiss franc, sinking to near a 2-week low of 1.0504 around 12:00 am ET. The dollar-franc pair moved mostly sideways thereafter and is presently trading 9 pips lower than yesterday’s closing quote of 1.0539. The next downside target for the pair is likely to be seen around the 1.0380 level.
Against the euro, the greenback fell to a 2-day low of 1.3666 at this time and is likely to breach the 1.3690 support, which could set its weakest level in nearly 4 weeks. The euro-buck pair that closed yesterday’s deals at 1.3614 is presently quoted at 1.3640.
The US dollar declined to 1.5441 against the pound before shedding some gains around 1:55 am ET. The cable that closed Tuesday’s deals at 1.5383 is presently quoted at 1.5396.
On the flip side, the greenback rose to a 2-day high of 93.51 against the yen around 2:55 am ET mainly due to across the board weakening of the latter. The dollar-yen pair is presently worth 93.45 with 93.60 seen as the next upside target level.
Looking ahead, the euro-zone industrial production data for February is slated for release in the upcoming European session. Economists forecast industrial production to rise by 0.1% on a monthly basis and by 2.8% on a yearly basis.
Turning to the U.S., retail sales and consumer price data-both for the month of March are expected to influence the North American session. Inflation is expected to remain well contained as housing costs continue to weigh on the overall index, giving the Federal Reserve plenty of room to keep interest rates low.
Also, the Federal Reserve Chairman Ben Bernanke testifies on the economic outlook before the Joint Economic Committee at 10:00 am ET.