Marketwatch North America

Daily Insights
March 22, 2024

The U.S. Dollar Index is on track to close the week +0.80%, its biggest weekly gain since mid-January. The dollar’s advance can be directly linked to central bank activity this week, with the Fed decisively firm on no rate cuts in Wednesday’s rate policy decision vs. a surprise rate cut by Switzerland’s SNB and a dovish shift by the Bank of England.

Central banks are poising for a series of rate cuts with the U.S. Fed expected to join the rate cutting later this year. But in the meantime, as long as U.S. rates remain relatively high there is an added incentive to hold U.S. dollars.

Weekly gains for the dollar vs. the G10: +1.64% vs. CHF, +1.62% vs. SEK, +1.45% vs. JPY, +1.23% vs. NZD, +0.92% vs. GBP, +0.58% vs. EUR, +0.55% vs. AUD and +0.17% vs. CAD.

Today’s dollar advance is also partially explained by reduced global risk sentiment following China’s PBOC hinting at lowering the reserve requirement ratio for banks to boost liquidity, signaling that authorities are exploring new ways to increase economic stimulus. USD/CNH is +0.69% today to 7.2701, the yuan’s weakest point since mid-November.

Declining risk sentiment has translated into lower U.S. Treasury yields which have declined in all tenors, with the long-term tenors down the most. The 10-year benchmark yield is -0.065% at 4.203%.

Economic Calendar

CAD - Core Retail Sales m/m
GBP - GfK Consumer Confidence
CAD - Retail Sales m/m
AUD - RBA Financial Stability Review
USD - Fed Chair Powell Speaks
EUR - Belgian NBB Business Climate
USD - FOMC Member Barr Speaks
EUR - German Import Prices m/m
GBP - Retail Sales m/m
USD - FOMC Member Bostic Speaks
EUR - German ifo Business Climate
EUR - German Buba President Nagel Speaks
CNY - Foreign Direct Investment ytd/y
EUR - Euro Summit
GBP - CBI Industrial Order Expectations

Market Indicators

Currency Pairs
Pair High Low
usd/jpy 151.859 151.001
eur/usd 1.08681 1.08079
gbp/usd 1.26749 1.2575
aud/usd 0.65768 0.651
usd/cad 1.35886 1.35191
eur/gbp 0.86023 0.85675
usd/mxn 16.8254 16.7154
Equities and Commodities
S&P 500 5247.84
NASDAQ 18331
DOW 39829.2
GOLD 2175.34
SILVER 24.76

This document is for information purposes only and does not constitute any recommendation or solicitation to any person to enter into any transaction or adopt any trading strategy, nor does it constitute any prediction of likely future movements in exchange rates or prices or any representation that any such future movements will not exceed those shown on any illustration. All exchange rates and figures appearing are for illustrative purposes only. You are advised to make your own independent judgment with respect to any matter contained herein.