Pound Sterling (GBP)
The explosions in Brussels that have tragically killed at least 15 and left over 50 seriously injured. The action is being considered a terrorist attack. The events caused Pound Sterling to decline amid concerns that some campaigners for a ‘Brexit’ will use this tragedy to bolster claims of the ‘danger’ posed by migrants and refugees. Also weighing on demand for the UK asset was a mixed-bag of domestic ecostats. Of particular disappointment was February’s Consumer Price Index which remained at 0.3% on the year, missing the median market forecast 0.4%.
Euro exchange rates mostly declined on Tuesday as the Brussels tragedy weighed on confidence. Adding to the depreciation was mixed-results from domestic ecostats. One particularly disappointing data result was the German Manufacturing PMI which failed to meet with expectations of a rise from 50.5 to 50.8, with March’s result actually unexpectedly dropping to 50.4. This is dangerously close to the 50 mark that separates growth from contraction. German ZEW survey’s also failed to meet with respective market consensuses.
US Dollar (USD)
In response to a hawkish speech from Atlanta Federal Reserve President Dennis Lockhart the US Dollar climbed versus the majority of its rivals. Lockhart stated that he believed domestic data is evidence enough that the Fed should tighten policy as soon as April. Euro weakness is also lending support to the US asset. Later today, January’s House Price Index and March’s Manufacturing PMI should provoke USD volatility.
Australian Dollar (AUD)
The Australian Dollar advanced versus the majority of its currency rivals despite attempts from Reserve Bank of Australia (RBA) Governor Glenn Stevens to jawbone. This was due mainly to positive domestic data. The fourth-quarter house price index bettered expectations on both an annual and quarterly basis. Gains may be somewhat limited, or even reduced, as the European session progresses if the US Dollar continues to climb and if market sentiment dampens more in response to geopolitical turmoil.
New Zealand Dollar (NZD)
The New Zealand Dollar failed to rise in line with its Oceanic neighbour thanks to a complete absence of domestic data to provoke changes. Market intervention from the People’s Bank of China (PBoC) supported a slight appreciation, but risk-appetite has been somewhat reduced by the tragic events which have unfolded in Brussels.
Canadian Dollar (CAD)
Ahead of the first Federal Budget for the new left-wing government, the Canadian Dollar advanced versus the majority of its currency rivals. The appreciation is mostly the result of rising crude oil prices as many traders speculate that global oversupply is not quite as excessive as originally feared.