The United States Dollar is trading a touch weaker against most of the G10 this morning, as focus shifts away from ongoing trade battles toward a slew of central bank meetings this week
Overview
Retail sales data for February was released below expectations this morning, keeping the Dollar depressed against most major and minor peers. February’s rull reading showed retail sales only grew by 0.2% last month, and January’s figure was also revised downward to show a contraction of 1.2%. Sales excluding auto and gas numbers, however, did beat expectations, but January’s numbers across the board were revised further into negative territory. The Dollar’s move this morning, however, is not as outsized as we’ve seen over the last several sessions of high volatility as traders look ahead to the FOMC’s interest rate decision on Wednesday of this week.
Though the Fed is widely expected to hold interest rates steady this week, traders will – once again – be paying close attention to any forward guidance given by Jerome Powell & co., perhaps with even sharper ears than usual. The health of the US economy has been a primary concern for global markets over the last few weeks, and US stock indices closed in correction territory to wrap up last week. Treasury Secretary Scott Bessent said over the weekend that such a pronounced selloff in equities shouldn’t be cause for concern, but that this administration will not shy away from “difficult but necessary changes to the economy.” Fears of not necessarily a recession, but definitely a US slowdown at least partially driven by ongoing trade and tariff disputes, are roiling the global economy – many major and minor markets will be looking for Powell to instill some sort of a sense of calm.
The Bank of Japan and Bank of England are also meeting this week, though no rate action is expected from either of them. Both central banks are likely to discuss, at least in part, the current US and global economic picture. The UK in particular faced an unexpected economic slowdown last month. The Eurozone also releases CPI for February on Wednesday.
What to Watch This Week…
- Euro-zone CPI, Wednesday
- Bank of Japan Rate Decision Wednesday
- FOMC Rate Decision, Wednesday 2PM
- Bank of England Rate Decision, Thursday
- Monex USA Online is always open
Complete Economic Calendar can be found here.
EUR ⇑
The single currency, after losing some of its momentum against USD through the back half of last week, is back on the front foot this morning trading roughly a quarter percent stronger against the Buck. News broke on Friday that Germany’s political coalitions have reached a spending deal for the new budget, coming with a massive defense package that many economists think will be quite the boost to the Eurozone economy as a whole. It remains to be seen, however, exactly how the implementation of such a spending bill will play out, keeping EUR’s move on the news muted.
NZD ⇑
The New Zealand Dollar is the biggest mover in the G10 this morning, gaining more than three quarters of a percent of ground against the Buck following a Chinese briefing on measures to boost economic consumption. NZD is currently sitting at its best rate against USD in three months today, even following a downward revision to its GDP growth forecast for 2025-2026. Continued Chinese stimulus measures are likely to keep the Antipodean currencies afloat even in the face of poor trade relations between the world’s two largest economies.
