U.S. Dollar Records Weekly Gains Against Euro
What’s happening: The US dollar gained versus the euro on Friday, with investors booking profits from the recent surge in the European common currency.
What happened: The EUR/USD forex pair recorded its first weekly decline since February 28 with sentiment being hit by the latest economic data.
The greenback found support after the US Federal Reserve signalled it was in no hurry to slash interest rates last week.
Dollar vs Euro
Why it matters: The US dollar has remained under pressure this year amid concerns around President Donald Trump’s trade policies impacting economic growth. However, the greenback found some respite last week after the Federal Reserve kept interest rates unchanged and Chairman Jerome Powell projecting just two rate cuts this year.
Powell’s comments also signalled that the impact of inflation of the recent tariffs might be “transitory”.
Meanwhile, the Bank of England kept its monetary policy unchanged, while the Swiss National Bank lowered its benchmark rate. European Central Bank policymakers signalled that there is room for interest rate cuts this year, amid rising concerns over global trade.
The Bank of Japan also left interest rates unchanged at its latest meeting, while warning of heightened economic uncertainty due to US tariffs.
Dollar Gains Weekly
The European currency also came under pressure after the latest economic data showed that Eurozone’s current account surplus had shrunk to €13.2 billion in January, from €26.5 billion in the year-ago period. The goods surplus narrowed to €15.4 billion, from €27.2 billion.
The Eurozone’s consumer confidence indicator also dipped 0.9 points to -14.5 in March, versus market estimates of an improvement to a reading of -13.0.
Meanwhile Germany’s upper house of parliament approved public borrowing reforms to revamp defence spending and revive Europe’s largest economy.
The dollar rises against the euro again
The EUR/USD pair fell 0.3% to 1.0822 on Friday. The forex pair shed 0.6% last week to record its first weekly decline since February 28.
The USD/JPY gained more than 0.3% on Friday, while the GBP/USD pair declined around 0.4%.
What to watch: Investors will continue monitoring the Trump administration’s tariff announcements.
Data on Chicago Fed National Activity Index (1630 UAE Time), S&P Global manufacturing PMI (1745 UAE Time) and S&P Global services PMI (1745 UAE Time) will be released today. The Chicago Fed National Activity Index, which declined to -0.03 in January, is expected to improve to 0.08 in February.
Analysts expect the S&P Global US manufacturing PMI to decline to 51.9 in March, from 52.7 in February, while the services PMI is projected to improve to 51.2 in March, from 51 in the previous month.