US Dollar Dips against Euro, Sterling after Auto Tariffs
The US dollar trading on mixed note against its major trading partners early Thursday in the forex markets, gaining against the the Japanese yen and Canadian dollar, down versus the euro and British pound.
The FX market has seen surprisingly little reaction to yesterday’s announcement of a 25% tariff on US auto imports, according to ING note. Analysts noted that countries in the frame: Mexico, Canada, Germany, Japan and South Korea have not seen a meaningful decline in their currencies overnight.
“Perhaps the FX market is dealing with tariff fatigue, and apart from already being priced in, the muted reaction may be a result of Trump suggesting that next week’s reciprocal tariffs could be quite lenient”.
A quick summary of foreign exchange activity heading into Thursday showed that USDEUR rose to 1.0781 from 1.0751 at the Wednesday US close but below a level of 1.0792 at the same time Wednesday morning.
Eurozone private sector loan growth accelerated in February according to data released earlier Thursday. Growth rose from 1.3% in January to 1.5% in February for households and from 2% to 2.2% for businesses.
“This is historically still quite weak as it remains below the growth rates seen between 2017-19, but those growth rates could possibly be reached over the course of the year if financial conditions ease”, ING analyst Chris Turner said in a note.
European Central Bank Vice President Luis de Guindos is due to speak followed by ECB policy board member Isabel Schnabel and ECB President Christine Lagarde at 2:05 pm ET. The next European Central Bank meeting is scheduled for April 16-17.
A global trade war is bearish for the cyclically sensitive euro, according to analysts. GBPUSD rose to 1.2937 from 1.2889 at the Wednesday US close and 1.2906 at the same time Wednesday morning. There are no UK data on Thursday’s schedule. The next Bank of England meeting is scheduled for May 8.
USDJPY rose to 150.8560 from 150.5781 at the Wednesday US close and 150.1502 at the same time Wednesday morning. There were no Japanese data released overnight. The next Bank of Japan meeting is scheduled for April 30-May 1.
USDCAD rose to 1.4285 from 1.4282 at the Wednesday US close and 1.4250 at the same time Wednesday morning. Canadian average weekly earnings data for January are due to be released at 8:30 am ET. The next Bank of Canada meeting is scheduled for April 16. Foreign Investors Bet on Nigerian Tops Stocks
