The U.S. Dollar is trading in favorable ranges across the board as markets digest the affirmation of tariffs on metals as well as await to gauge the impact with Consumer Price Index figures.
Overview
Equity markets have taken a beating these past few days based on worries about the future if trade barriers are indeed implemented and begin to cause negative effects.
As CPI was released, the Buck started to move in mixed direction with numbers indicating that price growth slowed down in pace. February CPI rose only by 0.2% vs. 0.3% expected while the annual average fell from 2.9% to 2.8%. This bodes well for chances of Federal Reserve interest rate cuts since inflation appears to be tamed. Understandably, this development is not exacerbating Dollar gains.
Headlines will be mostly focused on the potential for entering a market correction in the stock market as the recent retreat has meant a loss close to 10.0% of market overall value. We shall see if any progress is made today in preventing tariffs from becoming embedded in the business equation moving forward. Tomorrow, we shall see if prices for suppliers are also spared in the form of Producer Price Index.
What to Watch This Week…
- U.S. PPI, Thursday
- University of Michigan Consumer Sentiment, Friday 10AM
- Monex USA Online is always open
Complete Economic Calendar can be found here.
EUR ⇓
The Euro has fallen since the publishing of this report, hitting the brakes after reaching its best levels in five months. Germany seems ready to pass key legislation that will open up about €1.0-trillion of planned lending and spending to rebuild infrastructure and expand defense capabilities.
Traders and investors will keep hopes for a reversal of tariffs if concessions can be achieved as parties engage in serious trade talks.
CAD ⇑
The Canadian Dollar has been on a roller-coaster run, up at the moment against the Buck while coping with the challenges of intensified trade tensions between the U.S. and Canada. As trade pact protocols have been set aside, the tariffs proposed have angered Canadian leadership and caused major retaliation as energy costs were set to sky-rocket for neighboring states and provinces. As the tit-for-tat continues, we see volatility sticking until some resolution comes or clarity about an endgame to all this.
