The U.S. Dollar is trading in stronger ranges across the board as the back-and-forth continues with uncertainty over the conflict and any potential ceasefire resolution to it.
Investors and traders are coping with the likelihood of a longer-than-expected conflict and how it will impact the pressure on inflation, which is already worrisome for many. Central bankers are surely going to provide opinion and guidance during a time when even they seem flustered by the economic upheaval and limited tools to address chaos from fast-paced havoc. The last three weeks have been a shock to energy costs and sent warnings that all else can get affected as long as the armed situation and damage from it continues.
Meanwhile, China’s economy seems thus far to be resilient, and commercial trade seems to have improved regardless of the tariff issues with the U.S. Beijing just approved Nvidia to sell its second-most powerful artificial intelligence microchips. Later at 2PM, all eyes will be on the Fed and Fed Chairman Jerome Powell’s answers to questions. They will have data to analyze from this morning’s release of Producers Price Index, which came in higher than estimated at 0.7% vs. 0.3%. Tomorrow is followed by the Bank of Japan, Bank of England, as well as the European Central Bank.
What to Watch This Week…
- Fed policy decision 2PM
- BOJ, BOE, ECB all meet tomorrow
- USA Online is always open
MXN ⇓
The Mexican Peso is down at the moment, but performing better in the past few days, which brought its value back up after dropping to its weakest against the Buck since January 12th. Falling to a 2-month low came as a result of growing concern for the negative effects that a slowdown in the American economy can have on its southern neighbor. Energy anxieties have only grown and while times at interpreted as helpful to petro-producers like Mexico, the Buck has mostly reigned supreme as the Go-To in a time plagued by uncertainty. We will hear from Banxico, the central bank next week on the 26th.
CAD⇓
The Canadian Dollar is also floating around its weakest point since mid-January ahead of the Bank of Canada’s decision announcement later at 9:45AM. Likely to cite inflationary worries, officials will make an argument for playing it cautiously and leaving things unchanged. Some banks are expecting the “Loonie” to have quite a day if the “hawkishness” is displayed, so it is worth assessing a limit for those settling in U.S. Dollars. The details will be in the statements and tone so there will be some volatility to deal with especially around 10AM.
