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Monday, March 19, 2018

Currency Market Trend Analysis: March 19, 2018

Currency Market Trend Analysis: March 19, 2018
Source: CXI International Payments Team

 

By The Numbers: Your FX Week In Review

 
 
Foreign currency value versus USD is decreasing
 
Foreign currency value versus USD is increasing

*Indicators show the percent change over the past week.

Currency Calendar

Date Releases / Holiday  
March 19, 2018 G20 Meeting EMU
March 19, 2018 Brexit press conference UK
March 19, 2018 FOMC Member Bostic Speech USA
March 19, 2018 ECB’s Mersch speech EMU
March 20, 2018 Consumer/Retail Price Index (Feb) UK
March 20, 2018 ZEW Survey – Current Situation/Economic Sentiment (Mar) Germany
March 21, 2018 Non-monetary policy’s ECB meeting EMU
March 21, 2018 Average Earnings including/excluding Bonus (Jan) UK
March 21, 2018 FOMC Press conference USA
March 21, 2018 Fed’s Monetary Policy Statement USA
March 22, 2018 BoE Interest Rate Decision/ MPC Vote  UK
March 22, 2018 Bank of England Minutes UK
March 22, 2018 BoC Wilkins Speech CAD
March 23, 2018 European Council meeting EMU
March 23, 2018 Retail Sales (Jan) CAD
March 23, 2018 Bank of Canada Consumer Price Index Core (Feb) CAD

Upcoming bank holidays and impactful report releases for select countries.

Market Analysis

Canadian Dollar

CAD/USD opened last week at 0.7804 and closed at 0.7637 – depreciating by 2.14% due to rising tension around trade and possible inflation on the rise.

Even with the exemptions on steel and aluminum the shuffle at the White House leans towards an aggressive stance on foreign relations. President Trump has already stated that Canada had a trade surplus with the US during an argument with Canadian PM Justin Trudeau. The NAFTA negotiations are going nowhere fast and there are talks about Mexico making a deal without the US being involved.

The Governor of the Bank of Canada Stephen Poloz has stated that the Canadian economy has room to grow without creating further inflation and they will let it go through. New home sales have dropped by 6.5%, the previous fall was 14.5%, these two instances occurring cause some tension and worry of the Canadian economy.

 

1. BoC Wilkins Speech: Thursday, March 22nd         

2. Retail Sales (Jan): Friday, March 23rd        

3. Bank of Canada Consumer Price Index Core (Feb): Friday, March 23rd


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British Pound

GBP/USD opened last week at 1.3851 and closed at 1.3942 – appreciating by 0.66% due to Brexit transition deal.

The EU and UK have finally reached an agreement on a transition deal for Brexit and there should be a sign-off by the end of the week. The transition period will be a 21-month process. With this transition deal in place this has brought more certainty for business and citizens of both the UK and EU.

With strong confidence it implies a stronger economy and so there is a slightly higher rate hike possibility. We will see what happens on Thursday at the Bank of England meeting. Depending on the CPI and Earnings that are going to be released a rate hike is possible.

 

1. Brexit press conference: Monday, March 19th         

2. Consumer/Retail Price Index (Feb): Tuesday, March 20th          

3. Average Earnings including/excluding Bonus (Jan): Wednesday, March 21st

4. BoE Interest Rate Decision/MPC Vote: Thursday, March 22nd

5. Bank of England Minutes: Thursday, March 22nd


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European Central Bank Euro

EUR/USD opened last week at 1.2307 and closed at 1.2296 – depreciating by 0.09%.

With the release of January trade balance being less then what the market expected it seems like the EUR has limited demand at this time. Depending on the outcome of the Brexit talks and also what comes out later this week with the European Council meeting that might change.

There is still a lot of tension with trade talks and Brexit the EU is battling multiple issues and opposite fronts. With a transition plan to be signed later this week, this should help EU and investors feel that the Euro is more desirable.

 

1. G20 Meeting (EMU): Monday, March 19th

2. ECB’s Mersch speech (EMU): Monday, March 19th         

3. ZEW Survey – Current Situation/Economic Sentiment (Mar, Germany): Tuesday, March 20th

4. Non-monetary policy’s ECB meeting (EMU): Wednesday, March 21st

5. European Council meeting (EMU): Friday, March 23rd        


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About the Author

Remon Shehata - Data Analyst

Remon educates corporate clients on foreign currency markets lending industry best practices that enhance client knowledge and create specialized solutions that fit each business. Interested in having a custom international payments strategy or foreign exchange risk plan? Request A Call


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