New Zealand dollar trades above US$0.60 

Key Movers

On the data front on Monday, the US February New Home Sales dropped 0.3% MoM from a 1.7% gain in January, below the market expectations for a 2.3% MoM rise. Meanwhile, the Dallas Fed Manufacturing Survey fell to -14.4 in March from the previous reading of -11.3. Overnight we saw the release of US Durable Goods Orders for February, which roundly beat expectations, according to data from the US Census Bureau. The data showed headline Durable Goods Orders rising 1.4% when 1.3% had been forecast, and Durable Goods Orders ex Defense rising 2.2% when 1.1% had been estimated. Durable Goods ex Transport also beat forecasts, coming in at 0.5% versus 0.4% expected. Finally, Nondefense Capital Goods ex-Aricraft rose 0.7% versus 0.1% expected. The US PCE report on Friday will be in the spotlight. The headline PCE is estimated to show an increase of 0.4% MoM, while the Core CPE is projected to rise by 0.3% MoM.
The pound faces pressure near US$1.2650 against the US Dollar in Tuesday’s early American session as the latter rebounds. The GBP/USD pair exhibits falls as investors expect that the Bank of England will be more dovish this year than previously anticipated, driven by lower-than-anticipated inflation data in January and February. A senior Bank of England policymaker has warned that financial markets are expecting too many interest rate cuts this year and that the UK central bank is unlikely to move before the US Federal Reserve. Catherine Mann, an external member of the Bank’s rate-setting monetary policy committee (MPC), said there were risks that UK inflation could persist at higher levels than in the US or the eurozone. Last month the Bank’s monetary policy committee voted by a majority to keep interest rates at the current level of 5.25%, the highest level since the 2008 financial crisis.