USD Can’t Shake That Sinking Feeling

The dollar can't seem to regain its footing. Coming into New York trading, the dollar was at the top of the FX leaderboard but it unravelled to finish near the bottom. There wasn't a clear catalyst but a soft Markit services PMI hurt.

Better news on Greece lent a bid to the euro as it rose more than 100 pips from the lows at the start of US trading to 1.0923. Greek 10-year yields fell a full percentage point after combative finance minister Varoufakis was taken off EU/IMF negotiations in a sign that Tsipras wants a deal. Late on Monday in a TV interview, he said they will reach a deal.

Technical developments were fascinating as cable and AUD/USD rose to one-month highs. Cable faces little immediate resistance but after gains in 10 of the past 11 sessions, it's a tough trade to chase. The AUD/USD highs on Monday fell just short of the 100-day moving avg and that will be pivot point.

At next, RBA Governor Stevens speaks at 2240 GMT. Some jawboning is assured and the market is evenly-divided on a May rate cut so traders will be hanging on his every word for a hint.

At 2350 GMT, Japanese retail sales for March are expected up 0.6% m/m. Talk about fresh BOJ moves later this week has cooled. Only 2 of 34 economists surveyed by Bloomberg expect a move but 23 expect something later this year.