Daily Market Update

Dollar Holds Ranges As Equities Look to Recover

April 03, 2018

Currency markets took a backseat to the headlines surrounding global equity markets yesterday.

USD

With much of Europe closed for Easter Monday, U.S. stock indexes plunged on renewed concerns of a trade war between the Trump administration and China and a deepening sell-off in tech companies. The risk-off trading continued overnight as European markets returned from holiday. The bleeding appears to have stopped for the time being as all major US index futures point towards a higher open.

The Bloomberg Dollar Spot Index is mostly unchanged from yesterday’s close and there is no major economic data on today’s slate. Therefore, we are likely to see familiar ranges throughout the day. That is likely to change as early as tomorrow morning as the ADP employment report could foreshadow Friday’s Non-Farm Payrolls print. Economists expect that the economy added 185K jobs in March after an impressive 313K the month prior.

The Fed’s Kashkari speaks at a regional economic forum in Minnesota this morning, and Fed Governor Lael Brainard speaks about financial stability in a lecture at the Stern School of Business this afternoon. While these speeches are worth keeping an eye on, they are unlikely to be market movers.

 

EUR

The Euro was mostly unchanged as European traders made their way back to their desks after a long weekend. Economic data came right in line with expectations to kept volatility muted. Eurozone manufacturing PMI was confirmed at 56.6 in final data, unchanged from a preliminary report. German retail sales were slightly off expectations, but were unable to move markets.

 

AUD

The Australian dollar ticked higher on strong data and a consistent central bank. Australian Industry Group showed the country’s March manufacturing index climbed 5.6 points, beating expectations. In addition, the Reserve Bank of Australia kept the cash rate at record low 1.5%. Governor Philip Lowe said that the bank’s forecast remains for faster growth in 2018.

 

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