The U.S. Dollar is weaker as global markets welcomed news of China’s government committing to uplifting the economy, which is translating into healthier stock exchanges.
Overview
The world’s second-largest economy is dealing with a new COVID outbreak that threatens to add a slowdown to the global trade woes already associated with previous lockdowns. The war’s toll is growing also for a financial system that just sanctioned away the world’s 11th largest economy in Russia. It seems the buck’s strength has already been built-in with gradual hiking from the Fed expected no matter the case, so it has lost momentum ahead of the meeting and presser at 2 PM today.Once again, there is some hope for resolution between Ukraine and Russia with reports that talks have made progress and the possibility that Ukraine abandons seeking N.A.TO. membership stays neutral, but with a military of its own while recognizing Russian territorial gains on the East. Oil prices meanwhile rose slightly but WTI did not go up to $100.0/barrel after the International Energy Agency announced that Russia’s output would fall by 25.0% next month. Fed-wise, the dot-plot will also be influential since a hawkish outlook on more than four hikes or more aggressive action could help the dollar reverse current losses and more.
What to Watch Today…
- No major economic events are scheduled for today
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EUR
The Euro rose further based on the news about the potential for Russia and Ukraine to put down their arms as well as the improved outlook for the global economy as China steps up stimulus. While COVID is also starting to return to the headlines, the bigger concerns now regarding the conflict and the economic effects take precedence. German bunds climbed in price as the German cabinet agreed to borrow another €200.0 billion to modernize its military as well as move forward with green energy projects for independence.
CAD
The Canadian Dollar is trading at its strongest level since the end of February as inflationary data in the form of the Consumer Price Index turned out higher than expected. February CPI expanded 1.0% vs. 0.9% and the yearly figure increased to 5.7%. This improves the chances of another interest rate hike from the Bank of Canada down the line as Governor Tiff Macklem has vowed commitment to fight inflation. Heir next meeting will not be until April 13th.
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