The U.S. Dollar is trading in mostly tight ranges across the board as markets continue to navigate lots of tariff talk while hopeful for clarity and breakthroughs.
Overview
Indeed, the economic outlooks of many are being downgraded as fear takes grip of different asset classes that worry the lack of guidance and different dates provided such as the April 2nd “Liberation Day” which could end up in reciprocal tariffs and now copper being an item to see levies possibly in weeks ahead.
Economists are trying to gauge the scope of actual implementation, and many business leaders are wondering about the effectiveness of enforcing so much. The head scratching has given the Buck a reprieve from the decline seen throughout Q1 by jumping half a percent over the past few days overall. For domestic equity markets, the risk-aversion thus far in Q1 represents the S&P 500 Index’s worst quarterly performance in three years.
With Durable Goods Orders surprising at 0.9% expansion vs. (-1.0%) contraction, FX is not reacting much yet. Tomorrow, we will get a look at the final reading of 2024’s Q4 Gross Domestic Product while on Friday we get February numbers for Personal Spending as well as Income while gauging inflation in the form of Personal Consumption Expenditures. USD value has fallen by 3.0% per the Bloomberg Dollar Spot Index this year. We shall see if that damage exacerbates or is somehow reduced in the March endgame.
What to Watch This Week…
- U.S. Q4 GDP on Thursday 8:30AM
- U.S. PCE Price Index on Friday 8:30AM
- Monex USA Online is always open
The complete Economic Calendar can be found here.
GBP ⇓
Sterling is dwindling after inflation suddenly slowed down and with current presentation by U.K. Chancellor of the Exchequer of the Spring statement expected to confront some harsh realities. As the official, Rachel Reeves, presents the Office for Budget Responsibility’s calculations, some economists are already predicting her to highlight the need to downgrade growth expectations significantly, possibly presenting a case to lower the target from 2.0% to just 1.0%. Weak growth and higher borrowing costs could mean filling a blackhole in the budget will not be feasible. In terms of prices, the 2.8% annual CPI average is the lowest since February 2024. This helps in putting some pressure on the Bank of England to be more stimulus-driven.
EUR ⇓
The Euro is trying to keep from declining too much after seeing 1.5% of its value drop in the last week. Without any data points, the Euro will be at the mercy of headlines for what is left of the week ahead of a plethora of indicators scheduled for next week. While enthusiasm over German fiscal expansion naturally uplifted the shared currency in a big and is fading away, it is important to note that European equities have done great in contrast to the U.S. stocks indices. The S&P 500 is at record underperformance against its European counterparts. Meanwhile, the Stoxx 600 Index is having its best quarter since the end of 2022.
