Yahoo Finance The Greenback Takes another Step Back as Geo-political Risk Eases
Earlier in the Day:
Economic data released through the Asian session this morning was on the lighter side. Stats were limited to February trade data and finalized industrial production figures out of Japan.
For the Japanese Yen,
Trade balance bounced back from a ¥1,416bn deficit to a ¥339bn surplus in February. According to figures released by the Ministry of Finance,
Exports fell by 1.2%, while imports tumbled by 6.7% leading to the surplus.
On the positive side, exports to China rose by 5.5%, partially recovering January’s 17.4% slide though that was about it.
Exports to Asia fell by 1.8% and by 3.8% to Western Europe. Exports to the U.S increased by just 2%, which was much softer than a 6.8% rise the previous month.
The Japanese Yen moved from ¥111.560 to ¥111.563 upon release of the figures that preceded the industrial production numbers.
Industrial production fell by 3.4% in January, which was better than a forecasted and prelim 3.7% decline. According to finalized January figures released by the Ministry of Economy, Trade and Industry, production was up by 0.3% year-on-year.
The Japanese Yen moved from ¥111.556 to ¥111.538 upon release of the figures. At the time of writing, the Japanese Yen was down 0.07% to ¥111.56 against the Dollar.
Elsewhere,
The Aussie Dollar was up by 0.41% to $0.7114, with the Kiwi Dollar up 0.31% to $0.6867. Risk-on sentiment through the early morning provided the upside for the pair. Expectations of a more dovish FED and optimism over the prospects of a U.S – China trade agreement fueled risk appetite through the morning.
The Day Ahead:
For the EUR
January trade data will be the key driver for the EUR. Forecasts are for the trade balance to slide from a €17bn surplus to an €8bn deficit in January.
A lighter economic calendar will leave the EUR exposed to market risk sentiment throughout the day. Progress on trade talks between the U.S and China remains a key driver. This week, there will also be more Brexit chatter, as Theresa May looks to garner support for the Brexit deal.
At the time of writing, the EUR up 0.11% at $1.1338.
For the Pound
There are no material stats scheduled for release out of the UK. The focus will be on Theresa May and whether the deal will be put to a vote for a 2nd time. News of increased support has failed to support the Pound through the early hours. Uncertainty over what lies ahead remains an issue, with EU member states now needing to approve an extension. Britain may just want 3-months and the EU may want more…
At the time of writing, the Pound was down by 0.07% to $1.3281.
Across the Pond
It’s a particularly quiet day ahead on the data front. With no material stats scheduled for release, the focus will be on Wednesday’s FOMC and any updates on trade talks.
For now, the general consensus is that the FOMC economic projections will reflect a single rate hike for the year. Fewer hikes would be negative for the Dollar, though much also depends on the growth forecasts. With sentiment towards policy, a negative, further positive news on trade talks would also be a drag for the Dollar.
At the time of writing, the Dollar Spot Index was down by 0.10% to 96.494.
For the Loonie
Foreign securities purchases due out of Canada later today will unlikely have an impact on the Loonie.
Market risk appetite will be the key driver through the day.
The Loonie was up 0.15% at C$1.3316, against the U.S Dollar, at the time of writing.
This article was originally posted on FX Empire
