The U.S. dollar gained against major pairs thanks to strong economic indicators and the end of month and quarter flows. The greenback had a positive week ahead of the Easter holiday. The first week of April will kick off with a plethora of U.S. economic data, the most important of all the U.S. non-farm payrolls. Central banks will get back into action with the Reserve Bank of Australia (RBA), although no changes to monetary policy are expected in the next meeting.
The U.S. dollar will finish the week ending May 12 higher across the board against major pairs. Despite the dollar rally losing steam as softer economic data was released the U.S. Federal Reserve kept the June rate hike on the table boosting the greenback on a monetary policy divergence basis. The central banks of New Zealand and England issued statements this week and made it clear that there are no rate changes coming soon, unlike the U.S. central bank.
Mexican airports and tourism operators are fast becoming a hotspot for investors betting they will escape the trade-related worries that have squeezed some other assets there, with lingering weakness in the peso seen providing further upside.
The U.S. dollar is weaker against major currencies across the board after the Fed hiked rates for the third time since the financial crisis but lacked upgrades to the economic projections. A proactive but patient Fed with other central banks standing pat meant the forward looking forex market came away with a less hawkish view on future interest rates and sold the U.S. dollar.
Comments from members of the U.S. Federal Reserve have put a rate hike in March back on the table. Lack of details on the Trump administration pro-growth policies had reduced the probability of the central bank raising interest rates but the words from Chair Yellen and other influential members now have the market pricing in an 80% probability of a rate increase on March 15.
Safe haven currency bets including the yen, the Swiss franc and to a lesser extent the Swedish crown rose on Tuesday as investors braced for a tensely-awaited speech to Congress by U.S. President Donald Trump.
U.S. President Donald Trump on Thursday spoke positively about a border adjustment tax being pushed by Republicans in Congress as a way to boost exports, but he did not specifically endorse the proposal.
The U.S. dollar had another difficult week as it depreciated against most major pairs. Central banks remained on the sidelines as the Bank of Japan, U.S. Federal Reserve and Bank of England all left their monetary policies unchanged awaiting further data. The Reserve Bank of Australia is up next on Monday, Feb. 6 at 10:30 pm EST. It is anticipated the RBA will not make any changes on its February meeting.
The defining moment of the week for the U.S. Dollar came as the first press conference of the President-elect Donald Trump unfolded. Few details on topics the market cared like infrastructure spending or fiscal stimulus were shared while the most combative aspects of his campaign were in full view.