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Greenback falls following dovish signals from the White House

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 increased slightly by around 0.07 percent last Friday. It was helped by both strong labor market data, which started to heat up again in March, and Trump’s nomination of Herman Cain and potential nomination of Stephan Moore for seats on the Federal Reserve Board of Governors. Both support Trump’s call for monetary loosening. Trump isn't happy with Jerome Powell and he is making that clear to the head of the Fed. Trump has told the media that the Fed should commence “quantitative easing” instead of continuing to stop its holdings of bonds bought during its stimulus program. He also said that the Fed should drop rates and there is no inflation.

Regarding the US trade war with China, it seems that the question only hinges on when the deal will be signed. Talks continue according to President Trump’s top economic adviser, Larry Kudlow, who said the US and China are “…closer and closer” to a trade deal.

Key Movers

Other than FX markets awaiting the European Central Bank’s monetary-policy decision on Wednesday morning, Brexit will be an important mover. The Brexit deadline is this Friday, so either Brexit will happen, or it will be delayed. British Prime Minister Theresa May is hoping to re-start stalled talks with opposition leader Jeremy Corbyn as she continues to seek a compromise on a deal that she can present to EU leaders this week.

The British Pound continues trading in a narrow range. Market participants continue sitting on their hands waiting for an outcome to the interminable chaos. The GBP/USD trades higher this morning at 1.3047, a 0.12 percent increase. We are probably going to have a support of 1.3013 and a resistance of 1.3089 for the rest of today's trading session.

Expected Ranges

USD/CAD: 1.3309 - 1.3350 ▼

EUR/USD: 1.1236 - 1.1285 ▲

GBP/USD: 1.3015 - 1.3075 ▲

AUD/USD: 0.7103 - 0.7140 ▲

NZD/USD: 0.6709 - 0.6760 ▲