higher. U.S. economic data was better than anticipated with the
February ISM manufacturing PMI rising to its highest level since 2004
as Centralized Reserve Chairman Ben Bernanke gave his semiannual
testimony before the Senate. The ISM, which was expected to rise to
61.0 from the prior month's 60.8, surprisingly climbed to 61.4.
Additionally, the employment component surged to 64.5, the highest
reading in three decades. Other economic data out of the US included
January construction spending which was slightly lower than expected
at -0.7% (cons. -0.4%) but the prior month's -1.6% was revised
higher from -2.5%. Bernanke said in his testimony that 'downside
risks to the recovery have receded' and noted that long-term
inflation expectations 'remain stable'. The cautious optimism came
as no surprise to the markets as the Fed has attempted to be more
transparent in communicating its views of late.
The Bank of Canada held rates steady at 1.00% as expected and noted
that Canada's recovery is 'slightly quicker than expected'.
USD/CAD bounced from multi-year lows below 0.9700 as the dollar gained
traction and is currently around 0.9745.
U.S. equities started the day positively but reversed and go steadily
lower throughout the day. The Dow Jones Industrial Average and the S&P
500 experienced significant declines and finished the day in the red
by about -1.39% and -1.59% respectively. Commodities surged with gold
and silver up by around +1.49% and 2.30% respectively. Oil rallied by
around 2.99% to nearly $100 a barrel. U.S. 10-year Treasury yields
dropped on risk aversion to about 3.40%.
On the data front for the upcoming Asia/Pacific session are Australian
4Q GDP figures, January HIA new home sales, and Japan's February
monetary base.
Source: ActionForex.Com
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