Top FX Market Movers

EURUSD

Existing Homes Sales Powers Greenback

Sparking off the dollar rally on the day, euro officials reported a worse than expected current account deficit. Expected to widen slightly on a non-seasonal basis, the overall Euro zone current account widened to an 11.3 billion euro shortfall, worse than the 0.3 billion seen last month.

The wider figure looks to erode at overall gross domestic product as well as lessen the urgency for higher interest rates when central bankers meet next. Subsequently, bearish sentiment was exacerbated as U.S. housing data looked promising setting off stop orders below the morning's support level. Now with price action consolidating, traders look to be quite passive ahead of the anticipated durable goods orders report tomorrow out of the U.S.

Expected to rise 1 percent, should the report end up higher, it would reverse the overly pessimistic drop of 9.9 percent seen in the month of January. Subsequently, the figure would add to mounting speculation that central bankers will elect to raise interest rates another 25 basis points when they meet next week. With no data slated for tomorrow, a positive report would also provide downside for the currency pair even testing the support figure.

GBPUSD

Higher Taxes Look To Crimp Consumers

The British pound took a beating on the session after UK Finance Minister Gordon Brown defended the proposed budget which includes heightened taxes. With retail sales and consumer sentiment already tepid, the new tax legislation looks to place a considerable burden on the individual consumer.

As a result, with spending lessened, overall growth may be affected as consumption and spending constitute approximately 60 percent of overall output. The report was especially depressing as CBI industrial trends suggested an incremental improvement, rising to a negative 16 print versus the previous negative 18 seen in the month of February.

The survey continues to indicate that the manufacturing sector is expected to remain unchanged, but slightly higher as activity remains tepid. In either case, sterling strength may be hard to come by now that the future continues to remain uncertain. This may also purport speculation over recent statements by officials calling for a rate cut in improving the current economic situation.

Nonetheless, Minister Brown remains steadfast in his expectation of the Queen's economy to grow at a 2 percent annualized clip this year.

EURCAD

Crude Rises Above $63, Powers CAD Bulls

With euro region data disappointing, traders sided with the recent surge in crude oil contracts to bid the EURCAD cross lower. Rising above the $63 a barrel price figure, the contract for May delivery surged higher on momentum of a surprisingly short EIA inventories report.

According to the report, inventories in the U.S. dipped 0.4 percent or 338.6 million barrels in the week for the first time in six. As a result, traders bid the commodity higher by $1.78 to $63.55 in the afternoon on the New York Mercantile Exchange.

With a good portion of the region's exports constituting of energy exports, approximately 25 percent, the uptick in near term prices will be fairly beneficial for the economy's productivity. Should the current momentum continue, sentiment is also siding with a potential rise in inflationary pressures as the labor market remains tight.

Further momentum may still be tricking in tomorrow given the shortage of data on both sides. If anything, further downside is imminent in the cross should tomorrow's U.S. data provide positive, leading the EUR major lower.