CAD, AUD Slip Following Central Bank Moves
The greenback remained mired near its lows against the euro and yen amid a dearth of fresh US economic data. The reports resume on Wednesday as traders turn to a barrage of US data, including the February ADP employment, Q4 labor cost, Q4 productivity, January factory orders, February non-manufacturing ISM, and revised January durable goods orders.

The ADP employment figure is not seen significantly impacting currency pairs, given last month's sharp inconsistency between the ADP and non-farm payrolls - in which the ADP revealed 130k in jobs creation while the NFP figure contracted by 17k. Nonetheless, tomorrow's ADP employment figure is seen falling to 20k, versus 130k in January. Factory orders in January are seen contracting by 2.5% versus an increase of 2.3% a month prior. Meanwhile, the February non-manufacturing ISM report is forecasted to improve to 47.0 from 41.9 a month earlier.

Loonie Slips after Rate Cut
The Bank of Canada slashed its benchmark lending rate by 50-basis points to 3.5% -- its largest ease in 7-years. The BoC also signaled the possibility for further policy easing over the coming months. The accompanying Bank statement reflected growing apprehension about a 'deeper and more prolonged slowdown' in the US, which 'suggests that important downside risks to Canada's economic outlook that were identified in the January Monetary Policy report update are materializing and intensifying'. The Bank also added that 'further monetary stimulus is likely required in the near term'. The dovish commentary from the BoC indicates at least another 50-basis point ease may be on tap at the Bank's next meeting.

Aussie Struggles despite RBA Hike
The Australian dollar continued to retreat away from its 24-year highs against the greenback falling to 0.9216 in the Tuesday session. Market expectations for additional policy tightening were tempered after the RBA delivered its post-meeting statement. Although the Reserve Bank of Australia tightened monetary policy with a 25-basis point rate hike to 7.25%, traders sold the Aussie on a more dovish delivered by the RBA. In the statement, the RBA said 'there is tentative evident that some moderation in household demand is beginning to occur, with business and consumer sentiment softer recently, and household credit demand slowing somewhat'. Further, the Bank stated that due to recent rate hikes and 'rises in borrowing costs which are occurring independently of changes in the cash rate, the overall tightening in financial conditions since the middle of 2007 is substantial'. As a result, we look for possibly another 25-basis point rate hike from the RBA in the second half of the year.