Watch ISM as a Leading Indicator for Payrolls (page 2 of 2)

Meanwhile in Switzerland, manufacturing sector PMI, consumer prices and the KoF economic outlook could trigger some activity in the Swiss Franc.

British Pound - Like the Euro, the British pound is stronger against the US dollar. The GfK consumer confidence report was the only piece of UK data on the docket and it came out right in line with expectations, revealing that confidence remained unchanged at -8 during the month of March. The situation with the captured UK soldiers seemed to have improved slightly. Iran aired a second apology by one of the captured soldiers, but according to Bloomberg News, Iran called upon the UK to ``guarantee'' British vessels wouldn't penetrate Iranian waters again, in a message delivered to the UK Embassy in Tehran yesterday that was reprinted today by the official news agency. It didn't repeat the demand by Iran's military yesterday for a British apology in connection with the naval crew seized in the Shatt al-Arab waterway." The EU has also stepped in to call for an immediate release of the troops. The progression of this geopolitical risk could play a big role in the fluctuations of the GBP in the days or weeks to come. A swift resolution would be positive for the pound while heightened tensions would be negative. In the week ahead, we are expecting UK PMI, the Nationwide consumer confidence report, industrial production and a monetary policy announcement by the Bank of England. Interest rates are not expected to be changed.

Japanese Yen - Even though the Japanese Yen has rallied against the US dollar, it has struggled to gain strength against the other major currencies. A drop in consumer prices puts the economy back in deflationary mode, which will give the Bank of Japan yet another reason to keep interest rates unchanged. We will need to wait to see whether this is simply a one month anomaly or the beginning of a new trend In contrast to yesterday's reports, overall household spending increased significantly in the month of February. Industrial production also fell less than expected, prompting Prime Minister Abe to say that the economy is on a strong recovery trend. The only piece of important data expected next week is the quarterly Tankan report on business confidence.

Commodity Currencies (CAD, AUD, NZD) - The Australian and Canadian dollars both strengthened today while the New Zealand dollar sold off following a sharp drop in business confidence and a weaker than expected Q4 GDP report. There was no Australian data released but gold prices firmed. Canada's stronger industrial production report offset its weaker GDP number. In the week ahead, there is no significant New Zealand data. Australia has a monetary policy announcement along with retail sales and the trade balance. The central bank is expected to leave interest rates unchanged. Canada will be reporting IVEY PMI and employment.