The U.S. Dollar lost over half a percent to close the week and could see further downfall after the release of Industrial Production and Manufacturing gauges disappointed.
Empire Manufacturing Survey showed the New York region is pessimistic, with a reading highlighting over more than 50.0% less optimism than was expected. More concerning, Manufacturing production contracted in February by (-0.4%) instead of expanding the estimated 0.1%, while the Industrial Production figures confirmed there was contraction in January and little growth of 0.1% in February when 0.4% was forecast.
It is possible that signs of slower activity here will start affecting the buck in a significant way, but there will need to be economic divergence with other regions that point at recovery meriting the dollar sinking against its counterparts.
What to Watch Today…
- No major events scheduled for today.
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The Euro has climbed back by almost 1.0% this week, recovering from a tumultuous start to March following a pick-up in data as well as hopes that trade uncertainties like Brexit can finally reach some closure. We shall see if the trend continues as many traders still doubt the anemic economy and chaotic political environment will keep on improving. Next week, with less U.K. focus, trade dynamics elsewhere will be back in the picture and data, plus the Fed announcement, will shake things up more than likely.
The Pound rose by 2.1% this week after key votes to determine the country’s future relationship with the rest of Europe. Today, Parliament will gather to debate and vote on whether Prime Minister Theresa May deserves a third shot next week for a vote on her already-agreed-upon-yet-twice-defeated separation deal. The Democratic Unionist Party out of Northern Ireland could switch their votes to push for another revision and back the government’s agreement with the EU as is.
If this happens, May will negotiate to see if she can reach the needed math to pass her solution, if not, there will be ambiguity surrounding the timeline of delays and deadlines. Neither Sterling, nor the U.K., will see tranquility for a while.