The U.S. Dollar is trading in mostly tight yet positive ranges to close out a week that could result in a small overall gain, almost half a percent, per the Bloomberg Dollar Spot Index.
Overview
Flows have been lacking wild movements without a definite sense of guidance across all market classes.
Tariff talk has dominated headlines and taken hold of markets which have lost appetite for risk with growing concerns about disruptions to trade. The escalation of “trade wars” is forming a perspective of potential doom and gloom as inflationary pressures could hurt consumption as well as employment. Consequently, Gold prices have reached new records, copper prices are sliding, and S&P 500 Index is possibly going to close Q1 with a 3.2% loss, its worst performance since 2023.
Domestic data for February was released showing an unexpected jump to Personal Income at 0.8% vs. 0.4% expected. However, Real Spending only expanded by 0.1% while it had a January revision of (-0.6%) contraction. Core Personal Consumption Expenditures came in at 0.4% over 0.3% showing that price pressures remain. Later at 10AM, we got the University of Michigan Consumer Sentiment survey for last month. For now, the Buck is up against most peers.
What to Watch This Week…
- Monex USA Online is always open
The complete Economic Calendar can be found here.
MXN ⇓
The Mexican Peso is still holding to gains for March, but suffered a drop naturally following the reduction of interest rates by 50 basis points. Banxico’s central bank officials chose to continue on its loose path and hinted at ongoing commitment to expansionary policy. With trade disputes dictating the economic mood, the policymakers believe there is room to stimulate the economy and will likely cut rates again by another 50bps at their May 15th meeting. Between now and then a lot can happen for sure that can change course and provide a different outlook.
EUR ⇑
The Euro may end March with a 3.0% improvement as German spending has revived the hopes for economic growth for the Euro-zone and wider continent. Nevertheless, that resilience will be tested right away in April with a deluge of indicators next week form inflation to Industrial Production as surveys continue to gauge how optimistic business leaders truly are considering all the headwinds as well. Per a European Central Bank take on 1-year inflationary expectations, prices shall continue to go up and average 2.6% instead of the previous reading of 2.5%. A few other surveys showed that there is still a negative sentiment when it comes to Industrial confidence.
