Forex

The madness of March leaves USD mixed

Summary:  The US dollar is going to close out the first quarter of 2019 on a mixed note as equity markets continue to extract meaning from the cloud of bland and vague statements surrounding the Sino-US trade negotiations.


Wall Street extended yesterday’s gains with prices supported by a somewhat improved tone to the US-China trade talks. There hasn’t been a lot of new information other than a tweet from US Treasury Secretary Steven Mnuchin describing the just-concluded negotiations as “constructive”, which makes the conclusion questionable.

Today’s US economic data were mixed to disappointing. Personal spending and income data were soft while New Home Sales were on the firm side. A rise in Michigan Consumer Sentiment offset a drop in the Chicago Purchasing Managers Index. The January reports are still sketchy due to the government shutdown and poor weather.

It wasn’t a good day for USDCAD bulls. The currency pair opened in New York with a bullish bias while probing topside resistance in the 1.3440 area. Prices drifted to 1.3420 ahead of the release of the January GDP report and then exploded lower, touching 1.3344 when Real GDP rose 0.3%. Statistics Canada described the data as “fully offsetting the declines in November and December 2018. The rise was widespread as 18 of 20 industrial sectors were up.”

The icing on the cake were the better than expected Raw Materials Price Index and Industrial Product Price data. Prices are still above the March uptrend line, which suggests bullish sentiment still prevails.

The US dollar is going to close out the first quarter of 2019 on a mixed note. The British pound is poised to finish as the best-performing currency by a long shot, although that could quickly change as the Brexit debacle extends into overtime. The commodity bloc currencies are also finishing on a positive note led by an oil-fueled rally in the Canadian dollar. Euro edged out the Japanese yen as the biggest loser.
Source: Saxo Bank/IFXA
The first week of the second quarter looks like it will be busy. The US/China trade negotiations will be a focus when China Manufacturing PMI data are released on Monday, while Wednesday’s US Retail sales report will be scrutinised to see if the weak December and January data were anomalies or evidence of a slowdown. The Reserve Bank of Australia meeting on Tuesday could cause fireworks if it adopts an easing bias.
USDCAD (four-hour, source: Saxo Bank)
Disclaimer

Saxo Capital Markets (Australia) Pty Ltd prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Combined Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Pty Ltd.
Level 25, 2 Park Street
NSW 2000
Sydney
Australia

Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Pty Ltd ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Combined Financial Services Guide & Product Disclosure Statement to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as CFDs and Margin FX products may result in your losses surpassing your initial deposits. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.
Please click here to view our full disclaimer.