USD struggles to capitalize on stronger data – Westpac

By FXStreet Richard Franulovich, analyst at Westpac explained that the key leading indicators in the US, such as the regional PMIs, are rising strongly and their US data surprise index has some distance to run higher before it tops out.

Key Quotes:

“The handful of regional US business surveys released so far for March – NY Empire, Philly and Richmond – have all posted an aggressive bounce.

To recap, the Empire headline index rose from -16.6 to +0.6 in March, the Philly Fed index rose from -2.8 to +12.4 while today’s Richmond Fed index rose from -4 to +22. See slide below. That puts the Empire survey at 8 month highs, the Philly Fed index at 13 month highs and the Richmond index and near 6 year highs, all but completely reversing the soggy recessionary readings of the last year.

The breadth of the stronger March readings – apparent across all these regional surveys – points to a genuine signal rather than statistical noise. The signal is exceedingly strong too, an unweighted rolling 5 year average z-score of these three regional surveys recovered from -1.3 to +1.2 in just one month – the biggest one month turnaround by a very comfortable margin. A …read more

Source:: FX Street