The U.S. Dollar is quietly fluctuating this morning after trading sessions characterized by risk-aversion. Data out of the Euro-zone was mixed, which helped maintain familiar ranges with the majors. Commodities have been trying to bounce back, especially after prices of metals fell to their lowest levels in months throughout yesterday. Oil is trying to mount a bit of a comeback, which should help resource-based currencies if it continues throughout the day. The Bloomberg Dollar Spot Index is up almost 1.0% thus far in March.
Without any figures slated for release, we will see what will move markets today as political headlines unravel. The rest of the week will be packed with U.S. indicators and we shall see if events such as central bank meetings elsewhere affect any USD pair.
The Euro remains under pressure following underwhelming numbers for Germany despite overall health in Euro-bloc growth. Gross Domestic Product came out as expected at 0.4% quarterly growth while Industrial Orders in Germany revealed the worst data since 2009. The bipolar nature of the European recovery highlights the challenges for the Union’s largest economy, one that may be lagging as a result of a slowdown globally and the precarious situation around most of the continent.
Politics will likely continue to subdue any potential Euro gains. At least in the Netherlands, the rightist Freedom Party may be losing its momentum. Geert Wilders, the anti-trade candidate for Prime Minister is losing popularity in the latest polls because of criticism growing over Donald Trump’s immigration agenda, similar to Geert’s. The general elections will take place on March 15th and will serve as measure of just how successful rightist populism can be in modern Europe.
Pound Sterling is trading at its weakest level since January 18th after poor sales figures and need further debate in the House of Lords regarding Brexit. Coming up with a deal to present to the EU is not easy, but the process is moving along. Prime Minister Theresa May does plan on invoking Article 50 by end of March, but parliamentary must approve.
Tomorrow, Chancellor of the Exchequer, Phil Hammond, will present the budget, an event that could further sink the GBP. Furthermore, Retail Sales contracted for the second month in a row, adding to the argument that Brexit will be tough, but even worse with a slowdown in the making that resembles a recession.