The U.S. Dollar is standing firm against most peers while being pulled in different directions as the Japanese Yen floundered while the Antipodean tender of AUD and NZD rose.
Overview
This week has been characterized by increased volatility and lack of clarity because of the ongoing conflict in Ukraine, where a cease-fire was supposedly agreed upon that will allow for humanitarian relief efforts in the cities most affected. Neither commodities nor stocks seem to know whether to take off or crumble.
As long as the war goes on, the buck will play both safe haven and source of value as the Fed is set to hike interest rates regardless of a strange time in the economy.Data certainly helps, with the March change in Non-Farm Payrolls coming in slightly lower than expected at 431K vs 490K, but with an upward revision of the month prior from 678K to 750K. The Unemployment Rate fell from 3.7% to 3.6% while Average Hourly Earnings did improve from 0.1% last month to 0.4% this time around.
Today we will see if equities find some positive momentum or if the buck remains buoyant to start the second quarter.
What to Watch Today…
- No major economic events are scheduled for today
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EUR
The Euro stuck to familiar ranges as Russia’s campaign in Ukraine continues. The negative effects keep piling up as now Russia threatened to cut off all energy sources unless the country is paid in Russian rubles for the access and material. Germany and other countries are working hard on figuring a way to even ration natural gas use and be less interdependent.Additionally, we must turn our attention to the upcoming Presidential elections in France, a risk event that at the moment is seen as positive for the euro if Macron stays in power. Indeed, the French leader is leading the polls but has lost some of the momenta that followed his strong stance against Russia’s aggression. The first round of elections will be on April 10th.
CAD
The Canadian Dollar had gone down following news that Russia and Ukraine did not have fruitful peace talks but has managed to erase losses following yesterday’s Gross Domestic Product figures for January. GDP increased by 0.2% in January while it is estimated that February witnessed a 0.8% uptick. We shall see if the second quarter of better headlines can increase improve global growth outlooks that will in turn benefit the CAD strengthening.
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