US Dollar Extends Bullish Momentum in FX Markets
The US dollar rose against its major trading partners early Wednesday in the foreign exchange (FX) markets except for a decline versus the Canadian dollar, ahead of durable goods orders data for February.
In the first three month in 2-25, the dollar index – which had rallied strongly between September and January – is headed for a roughly 4% drop. It was last stalled at 104.28.
A quick summary of foreign exchange activity heading into Wednesday showed that USDEUR fell to 1.0791 from 1.0795 at the Tuesday US close and 1.0821 at the same time Tuesday morning.
There are no Eurozone data on Wednesday’s schedule. The next European Central Bank meeting is scheduled for April 16-17. Also, GBPUSD fell to 1.2907 from 1.2946 at the Tuesday US close and 1.2951 at the same time Tuesday morning.
UK consumer prices rebounded less than expected in February after a January decline, while the year-over-year rates for both overall and core CPI slowed, according to data released earlier Wednesday.
UK Chancellor Rachel Reeves’ budget estimate is expected to be released, while the market anticipate rate adjustment ahead of the next Bank of England meeting is scheduled for May 8.
USDJPY rose to 150.1750 from 149.8934 at the Tuesday US close but was below a level of 150.2009 at the same time Tuesday morning.
The Japanese leading index rose more than expected in January, though at a slower pace than in the previous month, according to data released overnight. The next Bank of Japan meeting is scheduled for April 30-May 1.
USDCAD fell to 1.4250 from 1.4281 at the Tuesday US close and 1.4285 at the same time Tuesday morning. Canadian wholesale sales data for February are due to be released on Wednesday. The next Bank of Canada meeting is scheduled for April 16.
Relatively, the US dollar index (DXY) has extended its short-term bullish momentum this week in with intraday fluctuation. The euro, which spent a week edging lower from a five-month high, has dropped to $1.0776, a fresh 3-week low.
Russia’s rouble rose 0.5% to 84.20 after U.S. deals with Russia and Ukraine to pause attacks at sea and on energy targets, while wheat prices fell as the U.S. said it would push to lift sanctions on Russian agriculture.
That leaves the focus on next week, when U.S. President Donald Trump has threatened to impose – or at least provide details of – a new round of tariffs on autos, chips and pharmaceuticals.
Sterling weakened after data showed British inflation slowed to an annual rate of 2.8% in February from 3.0% in January, while markets await the budget update. The pound was down 0.4% to $1.2890.
Tariffs and threats of the duties have already driven counterintuitive moves in currency markets as concerns they may drive down U.S. growth have confounded the assumption that the levies should be inflationary and drive up the dollar. #US Dollar Extends Bullish Momentum in FX Markets UBA Grows Profit by 26% to N766.6 Billion in FY2024
