U.S Dollar Weakens Against Major Trading Partners
The U.S dollar was weaker against its major trading partners early Friday ahead of the release of the final Michigan Sentiment index for March after a solid week, particularly against the yen.
New York Federal Reserve Bank President John Williams speaks on monetary policy challenges, followed by Federal Reserve Governor Christopher Waller.
Multiple Fed speakers this week have suggested that one or more 50-basis point fed funds rate increases are on the table for some time this year, the first one possible at the May 3-4 meeting.
US stock futures were marginally higher, maintaining Thursday’s gains after US jobless claims fell to its lowest level since 1969. Dow Jones Industrial Average futures gained 0.3%, S&P 500 futures increased 0.4% and NASDAQ futures inched up 0.4%.
Oil prices fell, with both front-month global benchmarks Brent crude down and West Texas Intermediate crude down 2.8%, after the US and European Union struck a deal on liquefied natural gas as the latter seeks to cut its reliance on Russian gas.
However, shares of Russian stocks and Russia-focused exchange-traded funds remain halted on US exchanges.
A quick summary of foreign exchange activity heading into Friday shows that GBP-USD ticked up to 1.319 from 1.3188 at the Thursday US close and was down slightly from the 1.3193 level a day ago.
UK retail sales declined in February rather than rising as expected, data released earlier Friday showed, as online sales slumped. UK consumer confidence declined to its lowest level in 16 months in March.
After a 25-basis point rate increase last week, the Bank of England is seen raising rates further at its next meeting in May. Bank of England member Catherine Mann speaks at 9:00 am. READ: Dollar Weakens Ahead of Powell’s Reconfirmation Hearing
EUR-USD rose to 1.1015 from 1.0998 at the Thursday US close and from 1.0989 a day earlier. Consumer and business confidence turned lower in March in both Italy and Germany, with the situation in Ukraine the main factor, data released earlier Friday showed.
Spain’s GDP accelerated in Q4 from the previous quarter, prior to the beginning of the conflict. The European Central Bank is expected to be cautious regarding the pace of its tightening cycle.
USD-JPY slipped to 121.6154 from 122.3513 at the Thursday US close and from 121.6609 a day earlier. Tokyo consumer inflation released overnight hit a two-year high in March.
The data are a good indicator of Japanese inflation for the month to be released in a few weeks. The Bank of Japan is still expected to keep its policy rate unchanged for the near future despite recent inflation increases.
USD-CAD was virtually unchanged at 1.2528 from 1.2527 at the Thursday US close and 1.2566 a day earlier. Bank of Canada Deputy Governor Sharon Kozicki speak at 12:45 pm ET.
The Bank of Canada is expected to tighten further at its next meeting in April in response to high inflation, with the possibility of a 50-basis point increase being heavily priced in. U.S Dollar Weakens Against Major Trading Partners
