FOREX: Dollar Index Extends Recovery, Advances 0.75%
Apr-23 16:55
- Initial overnight price action was dominated by headlines emanating from President Trump, who said it was not his intention to fire the Federal Reserve Chair, Jerome Powell. The news provided a solid boost for the greenback as the market breathed a sigh of relief surrounding the pessimistic narrative attached to the US.
- Despite subsequently trading in a volatile manner, the US dollar index is gaining for a second consecutive session on Wednesday, registering a 0.75% advance as we approach the APAC crossover. This extends the bounce from Monday’s fresh 3-year lows to ~1.7%, with the DXY narrowing the gap back to the psychological 100 mark.
- Positioning dynamics appear to be leaning in favour of the greenback across the major pairs, as the likes of USDJPY and USDCHF look set to close the session with gains above 1%. For USDJPY, spot remains just shy of the overnight highs at 143.22, with initial firm resistance not seen until the 20-day EMA, at 144.90.
- Given the sensitivity of the Swiss Franc to souring sentiment in recent weeks, the recovery in risk appetite has understandably weighed on CHF. This brings USDCHF to 0.8280, a significant 3% recovery from the Monday lows. Resistance is seen at the prior breakdown point of 0.8333, the 2023 low.
- For EURUSD, we appear to be witnessing a technical correction, as even US treasury secretary Bessent remarked on the ‘substantial appreciation’ for the single currency. The softer price action and higher equity markets have weighed on EUR crosses, as the higher beta AUD and NZD relatively outperform.
- Separately, crude front month fell to a fresh low for the week on the potential for another increase in OPEC+ production in June. This in turn weighed on the Norwegian krona, prompting USDNOK to extend session gains to over 1%.
- German IFO data headlines the European calendar on Thursday, before US durable goods, initial jobless claims and existing home sales are scheduled.
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ITALY T-BILL AUCTION PREVIEW: On offer this week
Mar-24 16:52
MEF has announced it will be looking to sell E7.0bln of the new 6-month Sep 30, 2025 BOT at its auction this Thursday, March 27.
US: Tariffs Will Keep Taxes Low - Trump
Mar-24 16:48
Wires carrying select comments from US President Donald Trump and other administration officials, speaking to reporters ahead of a Cabinet meeting at the White House. There is no live footage available of the meeting, likely reflecting a change in protocol following a slightly acrimonious Cabinet meeting earlier in the month.
- Trump says he, “will be announcing tariffs on autos, aluminum and pharmaceuticals in the very near future”. He adds that “tariffs will keep US taxes low”.
- Reuters notes that Trump said the United States, “would need all those products if there were problems including wars.”
- Trump reiterates that he hopes the Federal Reserve "lowers interest rates" - a regular message Trump has issued on his Truth Social account in recent days.
- Treasury Secretary Scott Bessent said: "Interest rates are going to keep declining as energy costs decline."
- Commerce Secretary Howard Lutnick notes that the, “April 2 tariff announcements will launch the 'external revenue service'” - a new agency Trump proposed in January to collect tariff revenue.
- Secretary of State Marco Rubio said: “Russia war has to end through negotiation.”
- Homeland Security Secretary Kristi Noem said: “Russia is using icebreakers in the Arctic to do surveillance on the US.”
- Elizabeth Troutman Mitchell at The Daily Signal reports from the room that EPA Administrator Lee Zeldin: “The partnership with DOGE, and Elon Musk has been incredible in the EPA. The team is very talented, we wouldn't be able to do it without them.”
LOOK AHEAD: Tuesday Data Calendar: House Prices/Build Permits, Regional Fed Data
Mar-24 16:45
- US Data/Speaker Calendar (prior, estimate)
- 25-Mar 08:30 Philadelphia Fed Non-Manufacturing Activity (-13.1, --)
- 25-Mar 0840 Fed Gov Kugler on economy & entrepreneurship (text, no Q&A)
- 25-Mar 0900 FHFA House Price Index MoM (0.4%, 0.3%)
- 25-Mar 0900 S&P CoreLogic CS 20-City MoM SA (0.52%, 0.40%)
- 25-Mar 0905 NY Fed Williams open remarks NY Fed (text, no Q&A)
- 25-Mar 1000 New Home Sales (657k, 680k), MoM (-10.5%, 3.5%)
- 25-Mar 1000 Conf. Board Consumer Confidence (98.3, 93.6)
- 25-Mar 1000 Richmond Fed Manufact. Index (6, 0)
- 25-Mar 1000 Richmond Fed Business Conditions (1, --)
- 25-Mar 1130 US Tsy $70B 6W bill auction
- 25-Mar 1300 US Tsy $69B 2Y Note auctions (91282CMV0)
- 25-Mar Building Permits (1456k, --), MoM (-1.2%, --)
