The United States Dollar is trading in slight positive territory against most currencies this morning amidst several key market headlines combined with quarter-end flows
Overview
President Trump’s “liberation day” for a barrage of reciprocal (and other) tariffs is just two days from now, and he over the weekend pushed back on speculation that there may be exceptions or some sort of leniency for a group of nations to reporters on Air Force One. This weekend Trump announced that reciprocal tariffs set to be announced Wednesday would include all nations, not just the roughly 15 nations with the biggest trade imbalances, roiling both G10 and emerging markets as this is a departure from commentary from White House officials over the last two weeks. Of course, the specifics of these announcements do remain to be seen, but all signs point to heighted volatility and thinner flows this week as major players attempt to stay above the fray.
Quarter-end flows are also likely to inject extra volatility into the market today as both buy- and sell-side participants square their books to close out what’s been a rather dismal first three months of this year both for USD and for Wall Street. Thus far quarter-end has proved to give USD a bit of juice after the broad Bloomberg Dollar Spot Index lost more than 4% from Trump’s inauguration on January 20th, and flows today look to be on the same trend though a bit lighter. The data calendar is fairly light at the beginning of the week, but picks up steam in the back half with several key employment data releases out of the US to begin Q2. Market sentiment until these releases is likely to continue to be dominated by tariff talk and potential action on Wednesday.
What to Watch This Week…
- Eurozone CPI, Tuesday
- US ADP Employment Change, Wednesday
- US Non-Farm Payrolls, Friday
- Monex USA Online is always open
The complete Economic Calendar can be found here.
AUD ⇓
The Australian and New Zealand Dollars are the biggest losers in the G10 this morning following Trump’s weekend announcement that no nations would be excluded from April 2nd’s reciprocal tariffs. Previous news from White House officials had insinuated the possibility that Australia in particular could be negotiating some sort of exception or better deal from the US on these levies, but the weekend’s statement from Trump effectively quashed this speculation and AUD is bearing the brunt of the losses. Though Australia exports much more to China than to the US, blanket tariff action is likely to impact both China and the Antipodean nations in a fairly major way.
EUR ⇓
The single currency is losing a touch of ground against the Buck today following news that France’s Marine Le Pen, leader of the far-right National Rally party, has been convicted of embezzlement. With this conviction Le Pen is barred from electoral politics for 5 years, taking her out of France’s 2027 presidential election. French yields jumped to a session high on the news. German inflation also slowed more than expected in March, increasing 2.3% from this time last year. Expectations were for a showing of 23.4%, which would still have been less than last month’s 2.6% figure.
