We're happy to introduce the new Daily Commentary. A streamlined format highlighting the latest home currency updates, and the key movers affecting markets today. We hope you like it.
USD - United States Dollar
The US dollar index trades in a narrow range this morning, despite news that it might push it to the upside. The most recent news come from the total non-farm payroll employment numbers, which increased by 196,000 in March, and the unemployment rate, which was unchanged at 3.8 percent, showing notable job gains and a healthy economy. In spite of this news and amid dovish signals from the Fed and central banks in developed countries, it seems that the US dollar cannot get more gains due to the Fed putting both a ceiling on debt yields and a floor under the equity market. In contrast, there was a slightly hawkish speech from Federal Reserve policymaker Mester, who backed the Fed by keeping interest rates steady for the moment between 2.25 and 2.5 percent with “no urgency” to make any changes now. She is also said to be biased to either keeping rates where they are or moving them up a little bit. The US dollar index spiked a little after her speech.
Regarding the US-China trade deal, on Thursday, President Donald Trump said the US and China were very close to a trade deal that could be announced within four weeks. The US dollar had a muted reaction after that news. More locally, president Trump plans to nominate Herman Cain for a seat on the Fed board, making him the second of two political loyalists he will have picked for it.
British Prime Minister Theresa May asked the European Union for an extension to the Brexit deadline to June 30th to give time to reach an agreement with opposition leader Jeremy Corbyn. Also, the European Council President Donald Tusk is proposing to make an offer of a 12-month "flexible" extension to the Brexit deadline. However, the British Pound, the third component of the US dollar index after the Euro and Japanese Yen, did not hold gains and started to fall at 2:30 in the morning EST. The media says that the talks have not been constructive, which remains a Brexit syndrome with a fast-approaching deadline next week on April 12th. The UK might leave without a deal.
1.1212 - 1.1249 ▲USD/CAD:
1.3366 - 1.3405 ▲GBP/USD:
1.2985 - 1.3063 ▼AUD/USD:
0.7076 - 0.7120 ▼NZD/USD:
0.6685 - 0.6750 ▼