Forex4life

USD Drifts Lower by Korman Tam

At 4:30 AM UK March Retail Sales m/m (exp 0.5%, prev 1.4%)
At 8:30 AM Canada February Retail Sales m/m (exp –0.1%, prev –0.2%)
Canada February Retail Sales ex-autos m/m (exp –0.1%, prev –0.2%)

The dollar traded to a fresh multi-year low against the euro in the early Friday session to 1.3627, a level not seen since Dec 2004 when the single currency reached a record high at 1.3664. Given recent price action, particularly yesterday’s first close above 1.36 -- the pair remains well bid with traders intent on pushing the euro to a new all-time high against the dollar.

The outlook for the greenback continues to deteriorate with the US economy showing further signs of slowdown and increased likelihood for a Fed rate cut this year. There is no US data slated for today, but next week will see several key gauges on the state of the economy – with indicators on the housing market, consumer confidence, manufacturing, inflation and most importantly, growth. We’ll receive a first glimpse of Q1 GDP next Friday and it is expected to reveal further slowing in economic activity, down to 2.0% versus Q4 at 2.5%. Also, traders will closely scrutinize the PCE reading – the Fed’s preferred indicator of inflation, for clues on the timing of a potential rate cut this year.