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Tariff proposal hits US dollar

7th March 2018 Market Update

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🇬🇧 GBP – The pound saw little to no action yesterday and any movements were caused by their currency pairings not Sterling itself. MPC member Haldane spoke at the Royal Society for the Encouragement of Arts, Manufactures, and Commerce although nothing of note was said.

Today we are expecting another quiet day in the UK which provides a much-needed rest from all of the ongoing Brexit rigmarole we are so used to witnessing.

🇪🇺 EUR – The euro appears to be gaining momentum as a safe haven currency as the United States remains politically uncertain, as Trump threatens a trade war. This led to the euro strengthening nearly a cent against the dollar yesterday and marginally against the pound as well. There are no data releases from Europe today of note. The Italian election appears to have not effected the euro, and it could be a rather quiet day for the euro today also.

🇺🇸 USD – Donald Trump’s decision to impose tariffs on steel and aluminium products last week caused the dollar to weaken and it seems that this trend is continuing. FOMC Member Dudley spoke about the economic impact of the 2017 hurricanes on the United States, however as expected we didn’t see market fluctuation off the back of this.

Today we have the all-important ADP Non-Farm Employment change figure, this is set to decrease by around 40,000 which could add woes to the US dollar. FOMC Members Bostic and Dudley are also speaking around this time so keep an eye out for any particularly hawkish or dovish comments.

 

Key Announcements

🇺🇸 USD
13:15pm: ADP Non-Farm Employment Change
15:30pm: Crude Oil Inventories

🇨🇦 CAD
13:30pm: Trade Balance
15:00pm: BOC Rate Statement, Overnight Rate

 

Summary: There was a distinct lack of data out from the UK, Europe and the US yesterday and this was depicted by Sterling and the single currency trading within a 30-pip range throughout the UK trading session. It was a different story for cable however which weakened by a cent in the afternoon as the prospect of a global trade war was affecting the US.

 

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Darren Kilner

Darren Kilner

Darren is Head of Dealing at FairFX. Darren lives and breaths FX, his Mastermind topics are G8 currencies and economic forecasts.

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