Dollar Stabilises

With Japan on holiday, and the FOMC statement fully digested, the price action during the Asia session was relatively subdued. US real GDP rose at a +1.8% annual rate in Q1, below consensus estimates. However, given Fed Chairman Bernanke's warning that the number could be weak, the US dollar was not excessively affected. The deceleration mainly reflected a slowing of consumer spending growth. In other data, jobless claims jumped, which probably reflected Easter distortions. Chicago PMI and the University of Michigan confidence index are due, but are not likely on their own to halt the dollar's current downtrend.

In Europe, Talks on the proposed program of external assistance for Portugal continue, but have not yet reached a conclusion. There were further headlines from Euro zone officials, denying a Greek debt restructuring. ECB Governing Council member Mersch said the ECB will continue its gradual exit from its non-standard measures at an appropriate pace, and said the ECB never takes measures aimed at supporting banks in one particular country.