Daily Currency Update

USD - US Dollar

The USD is on a downward trend compared to other major currencies, staying under the 103.00 level on the US Dollar Index, indicating a weekly fall of over 1%. This downtrend has occurred alongside a drop in the yield of 10-year US Treasury bonds to under 4.1% and notable advances on Wall Street, with the S&P 500 setting a new record high. Market participants are now awaiting the February employment report which will include figures for Nonfarm Payrolls expected to rise by 200,000, a steady Unemployment Rate of 3.7%, and a forecasted slight dip in yearly wage inflation to 4.4%.

CAD - Canadian Dollar

The CAD is seeing a slight increase this morning as investors look ahead to job data from both the US and Canada. Following dovish comments from Fed Chair Jerome Powell to US legislators, the CAD has notably appreciated, moving from 1.3600 to the 1.3430s range. Additionally, the BoC’s recent decision to maintain rates while adopting a hawkish stance has also led to a more optimistic outlook for the CAD in comparison to the Federal Reserve's stance. Observe USD/CAD trends.

EUR - Euro

The EUR is retreating from its two-month peak, currently trading at about 1.0900. Thursday's surge was fueled by a softer USD and anticipation regarding the ECB’s policy direction. Although the ECB kept its principal rates steady, its updated outlook suggested reduced inflation and growth predictions for 2024. ECB President Christine Lagarde addressed the potential for easing the tight policy stance, emphasizing the necessity for additional data by the June meeting to decide on future actions.

GBP - British Pound

The GBP is little changed this morning as traders anticipate the release of NFP data. Despite this, the GBP continues to hold widespread appeal, driven by predictions of an earlier interest rate reduction by the Federal Reserve relative to the Bank of England, which could lessen the gap in monetary policy. The upcoming UK Average Earnings report will play a significant role in forming inflation outlooks, where persistent robust wage increases might moderate expectations for rate cuts.