(Bloomberg) -- A gauge of the dollar held its gains as US inflation came in cooler than forecast while concerns over a tariff-induced growth slowdown continued to swirl in markets.
- The Canadian dollar was the best performer in the Group of 10 ahead of the Bank of Canada decision.
- Bloomberg’s Dollar Spot Index rose as much as 0.3%
- US consumer prices rose at the slowest pace in four months in February, offering some reprieve after months of stalling inflation progress
- “Tariff uncertainty, since some actually went into effect today, is still a primary driver in markets, but the bigger story here is a sense of relief,” said Helen Given, director of trading at Monex USA.
- “As worries continue to swirl that the US economy is slowing down, traders see today’s undershoot as a good thing since it doesn’t point toward stagflation,” she said
- President Donald Trump’s 25% tariffs on steel and aluminum imports came into force Wednesday, triggering concern across export-reliant Asia and an immediate reprisal from the European Union as the global trade war enters a rocky phase
- USD/CAD fell 0.2% to 1.4407
- The BOC is likely to cut interest rates for a seventh straight meeting on Wednesday as the country braces for a trade war that cpuld plunge the economy into recession, unless there is a resolution
- EUR/USD traded 0.3% lower around 1.0883
- European Commission has launched “swift and proportionate countermeasures” on US imports into the EU, in response to the imposition of US tariffs on EU steel and aluminum imports
- ECB President Christine Lagarde said abrupt shifts in global trade and the region’s defense architecture will make it harder to keep inflation stable
- USD/JPY rose as much as 0.7% to 148.77
- Bank of Japan Governor Kazuo Ueda indicated he’s not too concerned about the country’s government bond yields ascending to the highest level since 2008, signaling he’s not planning any imminent action to counter the moves
Reporting by Anya Andrianova and Alice Atkins
