• USD/CHF +0.8%
• GBP/USD -0.5%
• USD/JPY +0.8%

USD/CHF

Data and Bernanke Power Dollar: Dollar data lent to near term greenback strength as bulls had plenty of evidence to advance on the day.  Although the New York sessions were relatively narrow, plenty of dollar bidding was sparked early on as inflationary suggestions remained lofty in conjunction with momentum built by Bernanke's comments in New York last night.  The key factor, although the overall figure dipped below estimates, is the fact the core number rose three times that of the consensus expectation.  Sentiment now leans towards a leakage into the consumer arena, bolstering further inflationary suggestions.  This in turn, with policy makers considering each individual report, looks to prompt further dollar strength on higher rates till the end of March monetary policy meeting.  Confirmation, subsequently, looks to be received on the policy maker end as Bernanke suggested further tightening on a growing economy.  With that said, bulls may not run into barriers till Friday's release of the durable goods report.

Rumorville: Take profits from the day's move look to be positioned higher at 1.3100 with stops above at 1.3040/50.  Any further buying interest looks to surface at the 1.2990 and 1.3000 handle should the selling interest take hold above current valuations.

GBP/USD

Spread Concerns Lead To Downward Pressure: Inflationary pressures are alive and well in the United Kingdom economy as consumer prices rose on the month.  Climbing back up to 2 percent from the previous 1.9 percent, the figure prompts further speculation that rates will likely not fall any time soon.  Speculation also looks to be backed by a rise in consumer spending from historic lows and a confirmed rebound in the housing sector.  The most recent RICS housing price balance showed an improving pickup from a recent decline as consumers return to the residential housing market.  With both factors on the rebound speculation continues to discount a dip in benchmark repurchase rates, lending to sterling bullishness.  However, driving the market to the downside today was concern surrounding the narrowing spread between sterling and dollar assets.  With rates set to rise in the U.S., the advantage now becomes nil for the pound as rates are set to remain at 4.5 percent.  Previously a carry candidate, mounting concern looks to press the pound lower should rate speculation continue.

Rumorville: Bidding looks to provide a near term bottom as buying interest surrounds the 1.7440 and 1.7420 figures.  Comparatively, further selling pressure, should the pullback occur, looks to ensue around the 1.7490 and 1.7520 figures.

USD/JPY

Traders Pare Back On Delayed Rate Decision: With no Japanese economic data on the docket, traders used the session to take advantage of further profit taking on dollar positive data.  Even as consumer spending and sentiment remain positive in the world's second largest economy, and machine orders reflective of strong exports, a definitive shift in rate policy still remains questionable.  Given the fact that policy makers stated a proposed shift, the actual rate increase looks to be delayed as the Bank of Japan awaits tacit approval of a rate hike, which may be implemented in the second half of the year.  As a result, any long positions may be considered premature even as the economy picks up. However,  with Schumer's visit to China this week, released statements may add some initiation of yen favoritism as it pertains to the yuan revaluation efforts.

Richard Lee is a Currency Strategist at FXCM.