Dollar Slides as Russia-Ukraine Talks Advance
The U.S dollar was lower against its major trading partners early Wednesday as signs that talks between Russia and Ukraine may be making progress propped up other currencies.
The highlights of Wednesday’s data schedule are the release of ADP private payrolls for March, an update to Q4 GDP and weekly oil stocks. Kansas City Fed President Esther George, a voter on the Federal Open Market Committee this year, speaks today.
Earlier Wednesday, the Mortgage Bankers Association reported that mortgage applications fell by 6.8% in the most recent week after an 8.1% drop in the previous week as mortgage rates hit a three-year high.
Markets are looking ahead to Friday’s employment report for March, which is expected to show slower payrolls growth after a 678,000 jobs surge in February, but a dip in the unemployment rate. Other data releases this week include personal income and spending data for February on Thursday and the PMI and ISM manufacturing readings for March on Friday.
A quick summary of foreign exchange activity heading into Wednesday shows that EUR-USD rose to 1.1128 from 1.1086 at the Tuesday US close and 1.1055 a day earlier on hopes of a de-escalation of tensions in Ukraine.
EU consumer confidence fell sharply in March, according to data released earlier Wednesday. Consumer prices accelerated in Spain and Germany in March, while producer prices ticked up in Italy in February.
European Central Bank President Christine Lagarde said earlier Wednesday that food and energy prices flatten out at elevated levels but noted uncertainty due to the situation in Ukraine.
GBP-USD rose to 1.3151 from 1.3094 at the Tuesday US close and 1.3099 a day earlier. There are no UK data scheduled for release on Wednesday. UK GDP will be released Thursday, followed by manufacturing PMI on Friday.
Bank of England Deputy Governor Ben Broadbent said earlier Tuesday that clearer communication from the BOE is useful but should not be seen as a promise of future rate moves. The Bank of England is expected to raise interest rates further at its May meeting.
USD-JPY weakened to 121.8379 from 122.8936 at the Tuesday US close and from 123.5763 a day earlier. Japanese retail sales declined for a third-straight month in February according to data released overnight.
The Bank of Japan continued its effort to defend its ultra-low interest rate cap by buying bonds, the opposite of other central banks that have begun monetary policy tightening. READ: Oil Settles Lower as Markets Price in Russia-Ukraine War
USD-CAD fell to 1.2479 from 1.2503 at the Tuesday US close and 1.2488 a day earlier. There are no Canadian data scheduled for release on Wednesday. Canadian GDP is scheduled for release on Thursday and manufacturing PMI on Friday.
The Bank of Canada is expected to tighten further at its next policy announcement on April 13, possibly by 50 basis points. # Dollar Slides as Russia-Ukraine Talks Advance
