At 1:00 AM Bank of Japan Meeting Minutes
At 5:00 AM E-13 March Trade Balance (exp 3.0-bln euros, prev –1.7 bln euros)
Germany May ZEW Current Situation (exp 79.0, prev 76.9)
Germany May ZEW Index (exp 24.0, prev 16.5)
At 10:00 AM US May Richmond Fed Manufacturing Index (exp n/f, prev –11)
The dollar remains buoyed against the euro, yen and sterling, but is mired near multi-decade lows versus its Canadian counterpart around 1.0850. The key highlight for the coming session will be Treasury Secretary Paulson’s meeting with Chinese officials in Washington. We anticipate further discussion on the flexibility of China’s currency regime and heightened calls for it to accelerate its move toward a free-floating currency. Global trade imbalances will also be another topic of interest that will likely be discussed in greater detail.
The greenback garnered support in spite of reports from Kuwait announcing an end to its dollar peg, and shifting to a basket of currencies instead. We continue to anticipate further demand for dollars in light of recent US equity market strength attracting additional foreign capital inflows. The S&P 500 index climbed into record territory on Monday, closing at 1,525.10, while the Dow Jones Industrial Average remains buoyed near all-time highs.
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