Euro, Sterling Rise as US Dollar Embeds Negatives
Euro and British Sterling rose as the US dollar continues to lose steam among majors in the forex markets. The US dollar fell against its major trading partners Tuesday, except for a gain versus the yen.
The greenback has suffered from President Donald Trump’s protectionism stance with tariffs threats against other bellwether economies, a development that has triggered concerns for recession as economic numbers wobble.
Market analysts attribute this shift to concerns over US economic stability, as Trump’s tariff policies on Canada, Mexico, China, and the EU fuel fears of an economic slowdown.
The euro surged after European leaders announced big spending plans for defence and infrastructure. This comes at a time when President Trump acknowledges that tariffs are causing a ‘little disturbance’ to the US economy.
“Our view is that the dollar is embedding quite a lot of negatives at the moment and the balance of risks for the coming weeks has shifted to the upside. Nevertheless, in this jittery market environment, we are not ready to pick the bottom in the dollar before key data events have passed”, ING analyst Francesco Pesole said in a note.
A quick summary of foreign exchange activity showed that USDEUR rose to 1.0887 from 1.0832 at the Monday US close and 1.0842 at the same time Monday morning. There are no Eurozone data on Tuesday’s schedule. The next European Central Bank meeting is scheduled for April 16-17.
GBPUSD rose to 1.2924 from 1.2877 at the Monday US close and 1.2913 at the same time Monday morning. The next Bank of England meeting is scheduled for March 20.
USDJPY rose to 147.5800 from 147.2831 at the Monday US close and 147.0204 at the same time Monday morning. Japanese GDP growth accelerated in Q4, according to data released overnight. The next Bank of Japan meeting is scheduled for March 18-19.
USDCAD fell to 1.4411 from 1.4442 at the Monday US close but was above a level of 1.4388 at the same time Monday morning. There are no Canadian data on Tuesday’s schedule. The next Bank of Canada meeting is scheduled for Wednesday, when a 25 basis point rate reduction is expected. Broadstreet Tempers Stocks Buying as Interest Rate Runs Ahead Inflation
