US Dollar Rises Against Sterling, Euro in FX Markets
Amidst rising protectionism policy stance in America, the US dollar strenghtened against its major trading partners on Friday except for a decline versus the yen, before the release of personal income, spending and price data for February.
With so much uncertainty about the current US administration’s policy, FX analysts in the market are on the lookout for new narratives.
Before dollar picked up against trading pairs, ING analyst Chris Turner asked could the ongoing rally in gold be telling the market about investor preferences away from the US dollar.
The forex market has seen surprisingly little reaction to yesterday’s announcement of a 25% tariff on US auto imports. 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”, ING says.
A quick summary of foreign exchange activity heading into Friday showed that USDEUR fell to 1.0768 from 1.0795 at the Thursday US close and 1.0781 at the same time Thursday morning.
Eurozone consumer confidence held steady in March while the business climate improved slightly, according to data released earlier Friday, though both indicated more pessimism than optimism. The next European Central Bank meeting is scheduled for April 16-17.
GBPUSD fell to 1.2930 from 1.2949 at the Thursday US close and 1.2938 at the same time Thursday morning. UK retail sales rose unexpectedly in February, lifting the year-over-year rate, while UK GDP growth accelerated in Q4, according to data released earlier Friday. The next Bank of England meeting is scheduled for May 8.
USDJPY fell to 150.8342 from 151.0348 at the Thursday US close and 150.8560 at the same time Thursday morning. Tokyo’s consumer price growth, an early indicator of the overall Japanese consumer price index, accelerated in March according to data released overnight. The next Bank of Japan meeting is scheduled for April 30-May 1.
USDCAD rose to 1.4327 from 1.4311 at the Thursday US close and 1.4281 at the same time Thursday morning. Canadian GDP data for January is due to be released, followed by the Canadian budget balance for January. The next Bank of Canada meeting is scheduled for April 16. Money Market Rates Steady Amidst Widening Banking Deficit
