Currency Highlights | March
03.03.2018
Please check updates for the most important currencies on the forex market.

USD

Its been an extremely challenging start to 2018 for the greenback. Though the last week has seen the greenback stabilize and plateau, there still remains another leg of USD depreciation as stronger growth across the G7 as well as more hawkish central banks elsewhere are likely to add to even further USD depreciation. Most analysts agree that there are very few reasons to be bullish on the greenback in 2018. Bias – bearish (weaker USD)

 

CAD

The Canadian dollar (CAD) has rallied strongly reflecting a rebound in domestic inflation as well as markets counting on additional rate hikes from the BoC. Given the current risks of being able to sustain the current red-hot property markets, labour markets and imminent risks around NAFTA, the CAD may not be able to rally much more from current levels. Bias – bearish (weaker CAD)

 

EUR

The euro continues to surge based on expectations that monetary policy will become less accommodative later in the year. With fundamentals continuing to improve across the Eurozone, there seems to be consensus amongst analysts that there’s still room for further appreciation in the single currency. Bias – bullish (stronger EUR)

 

JPY

The JPY remains vulnerable to firmer nominal yields globally as most do not expect the Bank of Japan (BoJ) to alter its aggressive accommodative policy stance through 2018, given that domestic inflation remains at 0.6%. That said, most expect JPY to weaken over the medium term. Bias – bearish (weaker JPY)

 

GBP

The pound (GBP) remains generally soft but has sustained a steady rise versus most major currencies as the Brexit fall-out has been less severe than anticipated. Still, the economy is hardly robust; consumer demand and housing are two key sectors of the economy that look somewhat fragile amid weak real wage gains. Most analysts expect the GBP to under-perform over the medium term. Bias – bearish (weaker GBP)

 

MXN

The Mexican peso will continue to be pressured by domestic politics with the upcoming election, and continued rhetoric surrounding a border wall, NAFTA, and immigration control. Despite the current run-up, the Peso is likely to maintain a depreciating tone over the first half of 2018. Bias – bearish (weaker MXN)