Daily Forex Fundamental Analysis – Mar 2, 2018

Bottom view of businessman and currency signs at background
The US dollar took hits against most of its counterparts when Trump announced his plans to impose higher tariffs on steel and aluminum as this sparked trade war fears. Data from the US was mostly better than expected, though, with the ISM manufacturing PMI up from 59.1 to 60.8 versus the 58.7 forecast so the dollar still managed to hold its ground against commodity currencies. Only revised UoM consumer sentiment data is lined up today.
The euro had a mixed round as it gave up ground to the lower-yielders but advanced against commodity currencies and the pound. Data came in mixed, with Italian manufacturing PMI and monthly unemployment rate coming in weaker than expected. German retail sales, import prices, and Spanish unemployment change data are due next.
The pound carried on with its slide as more traders tuned in to the EU draft agreement headlines and are waiting to hear what PM May has to say about it. UK manufacturing PMI fell from 55.3 to 55.2 but was better than the projected fall to 55.1. Construction PMI is due next but May’s speech would likely take the spotlight.
The franc took advantage of risk-off flows and weakness in its European rivals. Swiss manufacturing PMI also beat expectations by rising from 65.3 to 65.5 versus the estimate at 64.1. There are no reports due from the Swiss economy today so sentiment could be the major driver.
The yen regained ground to the dollar as fears of a US trade war returned and risk aversion was in full swing. Data from Japan was actually weaker than expected as the consumer confidence index fell from 44.7 to 44.3 versus the estimated improvement to 44.9. Earlier today, it was reported that the jobless rate improved from 2.8% to 2.4%.
Commodity Currencies (AUD, NZD, CAD)
The comdolls were hardest hit by trade war fears on Trump’s announcement, particularly the Loonie which is still reeling from NAFTA talks. Canada’s current account balance beat expectations but its Markit PMI was a miss. The monthly GDP reading is due next and a meager 0.1% growth figure is eyed.
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With an upbringing rooted in deep ethical values, Yashu Gola knows how to put honesty and dedication into his articles. This young and dynamic financial analyst has done his graduation in IT engineering. His interests in financial writing have once brought him to our digital doorsteps. Since then, he has been an integral part of ForexMinute.com and writes the most captivating news-articles on the foreign exchange industry, cryptocurrencies, and medical marijuana trading.