US Dollar Up Move Amid US Equities Gains, Sterling Broadly Loses Ahead of BOE - 3.4.2013

US dollar was broadly stronger from yesterday morning, the Dollar Index found support at 82.48 and then surged to reach on Wednesday morning as high as 83.03. Risk appetite improvement due to stronger than expected Factory Orders as well as Cyprus finalized the bailout terms with troika, getting two year extension on meeting targets set by international lenders, helped the US equities to close in positive light. Dow Jones Industrial Average rose up to a new all-time high at 14,675, S&P 500 also rose by 0.52% to 1,570.25. Surging US stocks underpinned greenback that gained across the board against its counterparties. Focus will be today on ADP Non-Farm Employment expected at 200K increase an early indication of Non-Farm Payrolls and on US ISM Non-Manufacturing PMI. British pound against the US dollar lost heavily ahead of BOE monetary decision due to weaker data weighing on sterling. UK Manufacturing PMI at 48.3 remained below 50 mark in March for a second consecutive month and was below expectations coupled by weaker Money Supply and Mortgage Approvals. GBPUSD was also under pressure due to greenback's appreciation, the currency pair dived to 1.5075 early this morning while EURGBP also gained ground from 0.8410 on Monday to 0.8492 yesterday, confirming pound weakness. BOE is expected to maintain monetary policy unchanged, thus any easing surprise would send pound lower. Concerning common currency ahead of ECB decision, it found resistance at 1.2877 against the greenback and dropped mainly on US dollar strength, as of writing trades at 1.2798. Manufacturing PMI on Tuesday for EZ was slightly better than previously but still below 50, Unemployment Rate remained at 12% without any surprise. EURJPY trades in 120.12/119.14 tight range for the last 2 days indicating neutrality of Euro confirming EURUSD driver is currently the greenback. BOJ’s 2-day meeting started with details on monetary policy to be released tomorrow morning.