Euro Well Supported

The dollar initially strengthened against the EUR and the AUD after the Monetary Authority of Singapore tightened policy by less than expected. However, the dollar's gains were quickly erased at the end of the Asia session when local media sources unofficially released a batch of China data ahead of time. CPI was slightly stronger than expected which raises the risk of further policy tightening. However, new loan growth and retail sales were strong, suggesting little sign of a slowdown in China and helping to boost global risk appetite. The Beige Book and retail sales data helped the dollar briefly. The Beige Book noted the economy is expanding, with widespread gains in February and March along with upbeat reports on the near-term outlook.

In Europe, ECB rhetoric levels seemed to increase over the past 24 hours. Belgium's Central Bank Governor Coene, referring to the recent ECB press conference, said that "Trichet gave a signal that the ECB hike was not a one-off" and it should "not be seen as a totally isolated decision". ECB Executive Board member Stark said that raising short term interest rates would not have much of an effect on economies in the Eurozone's periphery, implying once again that the economic difficulties on the periphery are no obstacle to future hikes. Greek Finance Minister Papaconstantinou said a debt restructuring would shut Greece out of the debt markets for a long time, while German Finance Minister Schaeuble said he is awaiting "a detailed analysis on the debt sustainability of Greece" and that if this report concludes that sustainability is in doubt "something must be done about it."