Daily Market Update

U.S. Dollar Keeping Its Gains For Now, Rewarded on Optimism

March 29, 2018

The U.S. Dollar remained in tight ranges after a Wednesday full of good news for the U.S. economy.

USD

The outlook for growth is strong at the moment and the evidence from GDP and Personal Consumption figures serves as a boost for the greenback. Overall, the dollar has had to recover from plenty of negativity over trade policy concerns, but has managed to regain over half a percent of its losses for the week.

Personal Income and Personal Spending numbers also revealed a stable state for the economy falling in line with exact expectations of expanding just like last month. We foresee some optimism going into April, but this can quickly fade as have most rallies this year because of bad headlines getting rapid reaction across global markets recently. Anything that threatens free commerce is a punisher for the buck.

 

EUR

The Euro has failed to flourish because of lack of faith in the sustainability of the European economic expansion that we have witnessed since the latter half of 2017. Some economists are starting to point at factors that could slow the pace of growth, especially since the politics of the continent are leading to new administrations seeking radical change.

We believe the pace of growth may naturally be slowing down, but Euro still holds advantages as foreign reserves have increased their Euro holdings based on the belief that the Euro-zone will remain in place and interest rates will be incremented in 2019. Do not sleep on the Euro.

 

GBP

The Pound stayed at familiar ranges, for the week, after a solid climb by the U.S. dollar against its counterparts. Recent revelations of plans by some government officials to push for a reversal of Brexit have not boded well for the Conservatives, who have to also combat divisions within their ranks. Exactly a year from today, the U.K. is set to leave the European Union as a member so the clock is ticking and the countdown’s pressure will be entirely on May’s cabinet to have concrete plans for each of the next four quarters before the big exit.

 

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