Currency Outlook


What Happened

  • March made the buck hit the brakes as a tumultuous month rewarded risk-takers amid bank chaos
  • Per the Bloomberg Dollar Spot Index, currencies had an overall recovery against the buck of about 1.5%
  • Promises of further interest rate hikes from the Fed did not translate into more flight to the safe-haven USD
  • Euro and Sterling climbed as the monetary policy remained tight, and markets celebrated avoiding the development of an energy crisis as winter-supply fears ended
  • Japanese Yen improved as a new Bank of Japan chief took over with expectations of ending years of easing


Monex USA’s View

  • April will be a month of facing the consequences of bank failure in March
  • Turbulence in banking resulted in the dollar losing momentum, but fears that it could trigger a global recession could turn the tide
  • Federal Reserve officials will be questioned on whether banking issues will force a rate cut in 2023
  • Mexican Peso and LATAM tender could stay on the rise if economic growth remains a feature per Q1
  • Uncertainty and volatility have been exacerbated by the rapid takeover of Credit Suisse and the chances that other banks will need help

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