Midday brief – Dollar sell off continues

The First Republic Bank got pulled out by eleven of the US biggest banks as the domino effect is unfolding in the banking sector after the failure of two banks over the weekend. The dollar remained under selling pressure on Friday as investors ran to other assets for safety. The Japanese Yen gained on safe-haven bids on the day.

USDCAD traded lower by -0.18% amid a correction in crude oil prices and broad dollar weakness. Crude oil prices turned north on Friday following a $30 billion rescue plan by eleven of the biggest banks in the US to the First Republic Bank. Looking ahead, data from Canada will show the value of Foreign Securities purchases along with the raw materials price index. The Loonie dropped from 1.3737 and may face a hurdle at 1.3650.

EURAUD dipped -0.38% following the release of the Eurozone Consumer Price Index data. Headline inflation in the euro area eased as expected in February from 8.6% to 8.5% while consumer prices month-on-month rose significantly from the prior reading of -0.2% to 0.8%.

The data came out after the ECB indicated that if baseline inflation rose the central bank would have “more ground to cover”. The AUD benefited from a positive risk tone on the day. The pair extended its 5-day losing streak as bears may reclaim 1.5800 and 1.5650.

European equities trimmed early session gains as the banking crisis persists. The FTSE100 gave up -0.29% from the 7500 as it slid towards a 7400 psychological low. The CAC40 lost -0.86% trading a few ticks away from 7000 as 6800 remained a key level on the downside. DAX tanked -0.48% below the 15000 mark as targets may be seen at 14700.

US stock futures were lower following the European stock market mood. The DJIA futures were down -0.42% trading close to the 32000 mark. A break below may give up 31700. S&P 500 futures traded-0.24% lower from the 3975 intraday high. The US100 futures were flat trading between 12560 and 12630. 

The University of Michigan will publish the preliminary consumer sentiment for March, while we all see the release of industrial production data.