• Market Looks Ahead On Employment Concerns
• Housing Sector Continues To Rebound
• Repatriation Continues, Keeps Speculation At A Minimum

US Dollar
Economic data was helpful to the dollar bull on the day as further suggestions of a May 10th rate hike were presented through a higher revised gross domestic product figure and lower initial jobless claims. Posting a 1.6 percent climb in the previous reading, the U.S. Commerce Department released revised and finalized output figures, to the tune of a 1.7 percent increase for the fourth quarter.  Subsequently, the price index rose 3.5 percent, slightly above the previous report.  Relatively all good, the revision was widely expected with the report merely confirming the preliminary estimate leading to staid dollar sentiment.  What did take center stage was the weekly initial jobless claims report as first time unemployment benefit claims declined by 10,000.  Posting 302,000 for the week, the current reading dips below the four week moving average which currently stands at 310,750.  However, the current reading fed speculation of a lower than forecasted Nonfarm payrolls report being released next week.  With the current four week average slightly higher when compared to the report preceding the February report, market sentiment looks to be concerned over an under 190K figure for the month of March.  Although trading is pricing in a 100 percent likelihood of another 25 basis point hike, lower employment figures would certainly jeopardize any subsequent hikes, leading to dollar weakness.  Looking ahead, dollar pessimism may reverse as we head into the Asian session with plenty of greenback fodder ahead tomorrow.

Euro
Unemployment increased in the Euro region while consumer confidence ticked lower, even as the currency pair rocketed higher on the session. For the month of March, unemployment in the region's largest economy rose by 30,000 versus expectations of a 6,000 decline, forcing the overall rate higher to 11.4 percent.  Additionally, consumer confidence ticked lower in France as the survey moved lower for the month. Nonetheless, traders bid the Euro single currency higher on the session on mounting conviction that the European Central Bank will continue to raise interest rates in next week's meeting.  Citing inflationary pressures, policy makers should remain preemptive as price increases continue to hover the upper boundary of the central bank's target rate and growth prospects continue on healthy export activity.  The remaining caveat seems to be the continued weakness in the domestic consumption arena.  Should consumers continue to remain hesitant on the larger employment problems, future growth may be questionable, as so will higher rates.   

British Pound
Nationwide housing prices contributed to the overall housing sector theme this week, bolstering earlier evidence of increasing mortgage approvals.  Declining 0.2 percent on the monthly comparison, March's housing prices rose a full 1.1 percent in the month according to Nationwide building society.  Subsequently, this boosts the annualized comparison higher by a 5.3 percent tick and fortifies sentiment of a founded residential property sector.  Coupled with recent climbs in industrial and manufacturing production, today's figures additionally lend to further speculation that the repurchase rate will not come under rate cut attack.  With a rebound in housing demand, improvements in overall production and relatively higher inflation, central banker are now more than likely, if only incrementally, to keep the current 4.5 percent as the economy continues to expand.  However, remaining a thorn in King's side looks to be continued melancholy in the consumer sector.  In accordance with yesterday's CBI trends survey, retail sales figures have remained pessimistic, even plummeting 1.6 percent in the monthly comparison in January.  As a result, further pound downside could ensue if consumption weakness continues as the overall economy is sure to feel the effects of lackluster demand.  The end all would prompt central bankers to intervene, ultimately lowering rates to snare individuals.

Japanese Yen
Completely disappointing the market, industrial production declined more than expected in the world's second largest economy.  For the month of February, preliminary reports point to a 1.7 percent slowdown for the month versus a pickup of 0.4 percent seen in the previous period.  Subsequently, this forces the annualized figure lower and conflicts greatly with the optimistic retail figures that we saw yesterday.  However, with the figure showing six consecutive months of higher output, the dip may be considered a simple pullback before further advancement continues.  Further repatriation was seen on the day as traders fought on both sides as the currency pair remained relatively near the close yesterday in New York.  Notably, the current environment looks to persist into tomorrow as voting on the Schumer/Graham bill has also been delayed till September.  The delay is likely to fill the market with even more speculation during the coming months as comments on both sides of the Pacific are surely to follow.

Kathy Lien is the Chief Currency Strategist at FXCM.