Currency Market Trend Analysis: March 19, 2018

Ryan March 19th, 2018

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 22^nd

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

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

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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 19^th

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

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

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

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

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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 19^th

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

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

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

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

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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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