Daily Currency Update

USD - US Dollar

The USD is strong, gaining against major currencies as investors focus on positive U.S. data and risk of postponed Fed rate cuts. European stocks are steady, but U.S. futures vary. Bonds are sought after, gold hits a new record, and oil prices increase. Fears of an attack on Israel by Iran are boosting demand for safe-haven assets, supporting the USD. With the dollar making solid gains this week, its strength could continue. Key economic data today includes U.S. Import Prices and the U. Michigan Sentiment for April, which may show a slight decline. Fed speakers today include Collins, Schmid, Bostic, and Daly.

CAD - Canadian Dollar

The CAD is weaker against the strong USD but is outperforming most G10 peers today and this week. While yield spreads with the USD may widen, rising metal prices and firm energy costs, boosting the Bloomberg Commodity Index to its highest since November, alongside a cautious Bank of Canada, could strengthen the CAD on the crosses. For example, EURCAD, recently capped below 1.48, could drop to 1.44/1.45. Observe USD/CAD trends.

EUR - Euro

The EUR is weaker today reflecting widening spreads favoring the USD. The 2Y cash bond spread has widened by 50bps since January, hitting -200bps, the widest since December. Last year, the spread peaked at -207bps, so the -200bps level might offer short-term support and help stabilize the exchange rate.

GBP - British Pound

UK economic data revealed a 0.1% growth in February, with a slight upward revision of January's GDP to 0.3%. The three-month GDP growth was slightly above expectations at 0.2%. Manufacturing showed strength, but construction declined, while services experienced a marginal increase. The data indicate a mild economic recovery.