FX Update: The dollar has traded generally firmer
FX Update: The dollar has traded generally firmer, led by a sharp drop in EUR-USD following sub-forecast data out fo the Eurozone. EUR-USD broke out of its recent narrow orbit of 1.1300 and tumbled over 50 pips in printing an eight-day low low at 1.1243. The preliminary Eurozone April composite PMI dipped to 51.3, down from 51.6 in March and undershooting the median forecast for a slightly lift to 51.8. The data has eroded recent optimism about prospects for a pick-up in economic growth momentum in Europe. Cable printed a two-week low at 1.3008, dragged lower by losses in EUR-USD, and despite above-forecast UK retail sales data. AUD-USD and NZD-USD also declined, while USD-CAD lifted to a two-day high of 1.3377. USD-JPY ground slightly lower, surpassing Tuesday's low at 111.84 in making a six-day low at 111.76. EUR-JPY dropped more sharply, while some other Yen crosses have also posted modest declines. The price action came with the MSCI Asia-Pacific equity index pulling back a little from nine-month highs. S&P 500 futures have also track moderately lower, though the index remains not far off record highs. Japan's preliminary April manufacturing PMI survey showed a slightly slower pace of expansion in the sector, though new export orders fell at the quickest pace in nearly three years. Market participants will now been looking to today's release of U.S. March retail sales anxiously awaited for corroboration on the improved growth outlook, as the December plunge was a major worry early in the year. Analysts expect a 0.9% rebound overall from February's -0.2%, and a 0.8% gain excluding autos, from -0.4%.