• Rising Consumer Confidence Boosts Dollar
• GfK Continues Downtrend Suggestion In Retail
• Yen Looks To End Fiscal Repatriation

US Dollar
U.S. based data was somewhat mixed, but traders took to the better than expected University of Michigan survey in bolstering dollar  favored moves.  According to the collegiate based survey, consumer confidence rose to an 88.9 print in the month of March.  A final reading, the report lends to further speculation of continued tightening bias as consumers remain fueling their spending habits.  Sentiment was confirmed by an additionally better than expected personal spending figure as the positive trend continued climbing 0.1 percent.  With the rest of the day's docket placed to the wayside, it becomes increasingly confirmed that rates will rise another 25 basis points as the Federal Reserve remains preemptive in its quest to battle down nascent inflationary pressures.  However, as mentioned before, one caveat remains held above the rest.  With dollar data spread throughout next week, mostly concentrated in the manufacturing sector, amassing attention will be placed on the upcoming employment figures.  Should employment be thin in the month, it may indicate otherwise what we have been recently been witnessing, a mild pickup in manufacturing and consumer confidence lending to growth expecations.  Granted, a lower figure will not automatically discount further tightening in the near term, but it does contribute to the specter of a return to the economy's weaker infrastructure, considered a dollar weakness.

Euro
Pessimistic euro data lent to further weakness on the day as major economies showed weaknesses in key surveys.  First and foremost was Germany's retail sales figures.  For the month of Feburary, consumers still weighed down by record unemployment levels and lowered economic expectations reined in consumption habits.  This pressured the overall figure, falling twice the consensus expectation by 0.6 percent.  This is a comparable pullback from the 2.7 percent surge and looks to be rather seasonal than a more permanent trend.  Nonetheless, the decline was coupled with lower wage growth in Italy, which climbed by only 0.6 percent.  Notably, however, and placing the most pressure on the region's single currency was a dip in both industrial and consumer confidence for the Euro zone.  Expected to post a negative two reading, the industrial survey improved but remained below in the sub par category.  Posting a negative one, the release continues to suggest company hesitance in an economic recovery and may translate into continued sector weakness on lowered expectations.  Subsquently, consumer confidence dipped lower past conensus figures.  Decling to a negative 11 reading, the survey continues to reflect pessimism in the country's population.  Nonetheless, rates are still expected to increase from their current status at next week's central bank meeting in light of the recently pessimistic growth suggestions.
 
British Pound
Today's Gfk consumer confidence data indicates that UK consumer confidence unexpectedly fell in March.  After registering at -4 in February, analysts expected confidence to remain at -4 in March; the downside surprise knocked just over 0.5 percent off the GBPUSD in Friday trading.  Subsequently, news of weaker consumer confidence follows the Wednesday release of the Confederation of British Industry's retail sales report suggesting tough times for the 2.275 trillion dollar economy.  The two surprisingly weak readings, which imply that consumers have sealed their wallets on reduced confidence in the UK economy, come just a week before next Thursday's Bank of England rate decision.  Minutes from last meeting released on March 22nd showed that on March 9th, the committee voted 8-1 in favor of keeping rates at 4.50%, with one member voting in favor of a reduction in benchmark repurchase rates by 25 basis points.  Although housing sector figures have been strong in conjunction with manufacturing and inflationary figures, the divide may grow among central bankers as consumer sentiment remains cellar dwelling.

Japanese Yen
Yen data was mildly optimistic as we fall on the last day of the fiscal year.  With repatriation a major theme in the single currency's week, the underlying may be set to breakout of the narrow range that has restricted fluctuations as inflationary suggestions remain strong in the world's second largest economy.  According to overnight reports, consumer price increase rose on the month in both Tokyo and National prices reports.  Surprisingly, core prices held up rising in the monthly comparison with some estimates pitting the rise to a simple unchanged for the period.  As mentioned before, the positive data looks to lend little help to the yen at the moment  without the government's seal of approval.  The saving grace for yen bulls seems to be increased speculation surrounding Chinese yuan revaluation as Chinese President Hu Jintao visits Washington in the first weeks of April.  With statements surely to follow the visit, yen bidders may see some strength till further approving suggestions surface from political heads.

Kathy Lien is the Chief Currency Strategist at FXCM.