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Dollar fights back in forex markets after poor run

The US dollar managed to regain some ground yesterday after an extended period of poor performance.

The greenback was buoyed by news that US Treasury yields were on the rise following a sustained low period.

It also benefited from struggles elsewhere in the global economic and political systems, including in Britain. As a result, the dollar index, which assesses the greenback’s performance in comparison to several other world currencies, went up by 0.1% in the USD/JPY pair to 110.065 yen.

This was a better performance than its position of 109.70 on Monday – which represented its lowest point since mid-February.

In the UK, little change to the pound’s value occurred as Brexit uncertainty continued. In the wake of Prime Minister Theresa May’s continuing inability to score a withdrawal deal, members of the House of Commons are now poised to take more of an active role.

The pound barely moved from $1.3197 in the GBP/USD pair.

In Australia, the dollar was up by 0.15% in the AUD/USD pair – reaching $0.7123 at one stage.

This week looks set to be a busy one on the forex calendar.

US building permits information for the month of February is due out at 12.30pm GMT. Month on month, this is expected to show a change from 1,317,000 to 1,300,000.

A housing price index for the month of January is also due out of the US at 1pm. This is expected to show no month on month change from its previous position of 0.3%.

The day will be rounded off by a speech from Christopher Kent, who is the Assistant Governor (Economic) at the Reserve Bank of Australia. He is due to speak at 11.10pm GMT.

Wednesday will begin with further central banking action in that region. The Reserve Bank of New Zealand’s interest rate decision is expected at 1pm GMT and is expected to be held at its current level of 1.75%.

At 9am GMT, the ZEW Survey of Expectations in Switzerland will be published by the Centre for European Economic Research, covering the month of March. This was last recorded at -16.6.

Two European central bankers will speak later in the day. Sabine Lautenschläger​, who is a member of the European Central Bank’s Executive Board, will speak at 10am GMT.

Luis De Guindos, Vice President of the European Central Bank, will speak at 10.45am GMT.

Looking ahead to Thursday, a data release on European consumer confidence levels for the month of March will be out at 10am GMT. This is expected to show a change from 0.69 to 0.67.

Initial US jobless claims for the dates around March 22nd will be out at 12.30pm GMT. This release is due to show a change from 221,000 to 225,000. Continuing jobless claims for the previous week will be out at the same time. This data was last recorded at 1,750,000.

Annualised American gross domestic product data for the fourth quarter of last year will be out at this time too. This is expected to show a change from 2.6% to 2.4%.

Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.


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