USD Consolidates Friday's Losses; Dudley Next

JPY crosses decline; Eurozone current account in surplus sa but deficit nsa; Eurozone construction output declined; Greek CDS auction; ECB deposits. Market turns to Canadian wholesale sales and NY FED president Dudley's speeches. A flurry of US housing data is due later in the week as well as Bernanke's appearance.

USD consolidates Friday's losses and continues to trade within narrow ranges during the London session. The exception are JPY crosses that are lower, perhaps because of repatriation of Japanese earnings due to fiscal year that ends on 31st of March. European equities are losing about 0.5% and the relative strength winner is JPY.

With little to influence the market today, traders are looking ahead to tomorrow's UK CPI and FED chairman Bernanke's speech, Wednesday's MPC minutes and NZ GDP, Thursday's European PMIs and Friday's Canadian inflation data.

Second tier data showed that Eurozone current account grew to EUR 4.5 bln in January from December's EUR 3.4 bln which is the biggest surplus since the beginning of 2008. However, nsa figures showed a sharp decline to EUR -12.3 bln from EUR 18.3 bln. Eurozone construction output declined 0.8% from previous -1.9% m/m and -1.4% from 9.8% y/y. EURUSD continues to hover around 1.3160.

Focus turns to Greek CDS auction with payout around USD 3.2 bln expected. Final results should be announced around 3:30 pm GMT.

ECB deposits continue to be elevated at EUR 758.75 bln which is over EUR 30 bln more than on Thursday.

The NY session starts at 8:30 am ET with Canadian wholesale sales that are expected to decline in January to 0.4% from previous 0.9% followed by US NAHB housing market index that is seen higher in March at 30 from 29.

Market volatility could increase at 8:35 am and also at 1:40 pm when NY FED president, vice chairman and FOMC member William Dudley delivers speeches in NY. Earlier there was a chatter that his speech could be dovish and given the fact that there are no hard data releases today, the impact could be strong.

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