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Investing.com - The economic calendar in the U.S. is busy this week, with updates due on the housing market, retail sales, industrial production and trade which will give investors fresh insights into the health of the broader economy.
A number of Fed speakers are also on the docket, including Chicago Fed President Charles Evans and St. Louis Fed President James Bullard.
China is to release what will be closely watched economic data, including a look at first quarter growth on Wednesday, after a flurry of soft data from the world’s second largest economy spooked investors earlier this year.
It will also be a holiday shortened week, with most major financial markets closed on Friday for the start of the Easter holidays.
The U.S. dollar slid to its lowest level in two weeks against the euro on Friday as risk appetite was boosted by signs of economic stabilization in China and a strong start to U.S. corporate earnings season.
Chinese data showed exports rebounded last month, helping offset weaker imports, and reports of another reduction in Germany’s growth forecasts, analysts said.
Data from Europe was encouraging, with euro zone industrial output declining by less than expected in February.
“It’s a party-like atmosphere for markets. Good news from China and U.S. earnings off to an auspicious start,” said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
“This has safe-havens on their back foot, that’s why the dollar is underperforming,” he said.
Against the Japanese yen, which tends to benefit during geopolitical or financial stress as Japan is the world’s biggest creditor nation, the dollar rose 0.34%.
The Australian dollar, which is sensitive to shifts in risk sentiment, was up 0.69%.
The British pound pushed higher against the greenback as traders were encouraged by the immediate risks around Brexit being pushed back by this week’s delay to the exit date. Sterling was up 0.19% at $1.3077.
The pound was weaker against the firmer euro, with the single currency up 0.23% to 0.8632 in late trade.
ING analysts said they expect sterling to fall over the next few months, in part because a Conservative party leadership battle could result in a hardline eurosceptic prime minister, and also because the six-month Brexit delay was too short for the Bank of England to tighten monetary policy.
The “partial clean-up of the GBP short positioning (and some built-up of new speculative longs) since the beginning of the year can also add to the reversal as GBP positioning is no longer meaningfully skewed one way,” the analysts wrote.