Daily Market Update

Markets Shaken by Tech Losses; U.S. Dollar Steadies

March 20, 2018

The U.S. Dollar is trading in tight ranges with some positive trends against Yen and commodity-based currencies.

USD

European stocks are back in green territory after yesterday’s major decline primarily caused by anxiety in the technology sector.

The risk-aversion was aiding the Yen, which has reversed its gains overnight after the return in appetite. Currently, there is much anticipation about what is coming in the week ahead and the greenback is likely to stay mostly quiet prior to tomorrow.

G-20 Summit in Argentina has produced a few headlines in regards to world leaders trying to quell fears of a trade war with the U.S. after imposing tariffs on steel and aluminum. There may be statements throughout the week that will impact FX flows, but now at least it is clear many nations are not happy with trade barriers. Pressure on the buck may arise also from the lack of progress in Congress on passing a spending bill that includes some immigration reform.

 

EUR

The Euro is trading around its weakest point since the end of February. The European theater has been hit with political uncertainty over Italy and the need to resolve new tariffs from the U.S. administration. Germany is going through a tough period of political friction as well, which bodes poorly the prospects of long-term EU growth.

Plenty of German politicians are bringing up socio-economic issues related to the Syrian refugee crisis to the Bundestag and Europe’s vision of open borders seems under threat. Although the European Central Bank may be ready to reduce easing measures, the Euro is being held back by concerns over national well-being in major EU economies.

 

GBP

The Pound remained in familiar levels after inflationary data came slightly under expectation. Consumer Price Index annual growth of 2.7% was under the predicted 2.8% while Producer Price Index figures revealed no expansion at all. Brexit news has carried the currency forward because of a relief felt about both parties agreeing on a transition period after the U.K. officially leaves. Other than that, all eyes will be on the Bank of England’s announcement Thursday. We foresee some hesitation to tighten any time soon.

 

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