Daily Currency Update

USD - US Dollar

The USD continues its decline following a previous drop, with the DXY index falling slightly above 105 earlier in the week to just above 104, aligning with April's typical weak trend for the USD. Despite a slight increase in US yields and a decrease in European bond yields, the USD remains unaffected. US 10Y yields may be stabilizing above 4.40%, and recent remarks from Fed officials suggest no significant change in their policy stance. Fed Chair Powell reiterated that it's premature to consider recent inflation figures as more than a temporary spike, maintaining that they don't substantially alter the policy outlook. Following Powell's comments, yields experienced a further decline, influenced by ADP and ISM Services data, which also pressured the USD. With seven Fed speakers scheduled today, including Harker, Barkin, Kashkari, and Musalem, only Barkin, a voting member, has not spoken since the last FOMC meeting. Additionally, the weekly claims data and February Trade report are due at 8.30ET.

CAD - Canadian Dollar

The CAD performed moderately well among major currencies, increasing by 0.2% due to slightly stronger stocks and crude oil, as well as a weaker USD. Although currently trading below the estimated fair value of 1.3573, this may restrict further short-term gains for the CAD. Future trends will largely depend on the USD, but stronger domestic growth and continued robustness in key commodity prices could further support the CAD or at least maintain a resistance level around the 1.36 mark. Canada's February Trade data will be released at 8.30ET. Observe USD/CAD trends.

EUR - Euro

The final March PMI data for Eurozone services and composite showed positive results, exceeding expectations. German services improved to 50.1, while Italy and Spain outperformed forecasts with 53.3 and 56.1, respectively. The Eurozone services were revised to 51.5 and the composite to 50.3, both higher than anticipated. Following these revisions, the EUR/USD saw modest gains, rising about a cent from the previous day's low.

GBP - British Pound

The pound underperformed today, with the final UK March PMI showing a slight downward revision. Services activity dropped to 53.1 from February's 53.8, marking the lowest point since November. Additionally, the BoE's Decision Maker Panel survey indicated a slight decrease in 1-year inflation expectations to 3.2% and anticipated lower wage agreements over the coming year, marking the first decline in seven months.