1.10 seems the limit for EUR/USD

•     1.10 seems the limit for EUR/USD

–    Went over 1.10 once on 19 March, several times yesterday but unable to maintain it

–    USD retreat is fundamentally based on lower US rate expectations and lower rates

–    BUT as QE proceeds, Eurozone rates likely to move lower, while accelerating US inflation likely to push US rates higher = USD-supportive

•     WTI up even though API stats show further rise in oil stocks

–    Due to strong PMIs, perhaps?

–    US Dept of Energy’s oil inventory data, to be released tonight, may reverse the move

•     Cleveland Fed says don’t worry about dollar’s effect on inflation

–    Says the threat of stronger dollar pushing down inflation is “overblown”

–    This eliminates one big reason why the Fed might refrain from tightening

•     Today:

–    Eurozone: German Ifo survey expected to rise; could be EUR-supportive

–    Sweden:  Economic tendency survey for March

–    US: Durable goods for February: headline figure expected to decelerate, but core (excluding transportation) expected to accelerate = could be USD-positive