The week ahead.

*Note..European daylight saving returns US ET to GMT-5.

Improved PMI data from China over the weekend could underpin the AUD & NZD at the beginning of the week. Monday 1 April is a bank holiday in Europe, but US traders will be at their desks.

Each week that passes brings us closer to rate cuts and of the currencies with cuts on the table, here is my opinion on the timings.

EUR: June or earlier

CAD: June

USD: June or later

GBP: August

AUD: November

NZD: November

Any data suggesting earlier or later cuts should see the currencies strengthen or weaken accordingly (bad data=earlier cut) the earlier the cut, the weaker the currency.

Historically, central banks have waited for FED to cut first, but with the US economy still very strong, it will be interesting to see if that's the case this time.

Potential market moving data starts with US ISM manufacturing on Monday. We have the RBA meeting minutes and German CPI on Tuesday. Coupled with Wednesdays Eurozone CPI (any sign of lower inflation in Europe could put pressure on the EUR in a good news is bad news scenario). Also on Wednesday, US service ISM is reported where is will be interesting to see if service sector prices are still contributing to sticky inflation. Then a quiet Thursday data wise precedes NFP on Friday.

Plus throughout the week, data from china could contribute to the 'risk environment'. Currently, I'm starting the week with my 'short CHF' bias intact. And the 'risk environment' will determine whether it's 'long USD' or i'd be happy with 'long AUD' if the market sentiment is 'risk on'.

Feel free to email any questions: johnelfedforexblog@gmail.com