Daily Currency Update

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The US dollar holds its gains following the perception of riskier financial markets due to a hedge fund fallout.

USD - United States Dollar

Safe haven currencies such as the US dollar rallied this morning following the start of a “risk-off” mode, linked to a dramatic fallout after a margin call from banks and the potential contagion from the unwinding of Archegos Capital Management positions. Furthermore, the family office of former Tiger Management trader Bill Hwang was behind the unique selling of more than $20 billion of shares on Friday. Nomura also warned of “significant” potential loss related to the unwinding.

US March Dallas Fed Manufacturing came in at 28.9 versus an estimated number of 16.8. It has pushed the US dollar higher versus G10 currencies, rallying 0.26% versus the Euro, 0.1% versus the Aussie dollar and 0.30% against the Loonie.

Key Movers

The Canadian dollar fell versus most Group-of-10 counterparts, tracking a decline in equity futures. Traders are eyeing an OPEC+ meeting later this week, when they will discuss global oil output. The USD/CAD pair rose 0.3% to 1.2585; however, it rose by as much as 0.4% to session high of 1.2627 earlier this morning. Technically speaking, there is an intraday resistance at the 1.2630 level, followed by the moving average (50) at 1.2650.

The combination of month, quarter, and fiscal year end noise just prior to the Easter Break suggests that this will likely be a week that lacks any real conviction, especially in currencies.

Expected Ranges

USD/CAD: 1.2566 - 1.2626 ▲

EUR/USD: 1.1760 - 1.1800 ▼

GBP/USD: 1.3764 - 1.3819 ▼

AUD/USD: 0.7624 - 0.7654 ▲

NZD/USD: 0.7000 - 0.7032 ▲