US Dollar Stays Supported by Easing of US-China Trade Tension as Well as Today's Data

Market Reviews

The US dollar was higher against other currencies after a higher than expected jobless claims report. The US Labor Department said that initial jobless benefits increased by 24.000 to 242.000. Analysts had expected claims to rise to 225.000 last week. US trade deficit widened to USD -57.6b in February, up USD 0.9b from USD -56.7b in January. Exports rose USD 3b to USD 137.2b. Imports also rose USD 3.3b to 213.2b. The dollar was also supported by reduce of a trade tensions between the US and China. European indices rose today, with DAX gaining 2.44%, the CAC gained 2.07% while FTSE is up 1.68%.

The euro fell under the pressure of weak data on business activity and retail sales in the euro area, as well as amid the strengthening of the US currency. The EUR/USD pair fell to 1.2255. Eurozone PMI Services was finalized at 54.9 in March, revised down from 55.0. That compares to February reading at 56.2. Final PMI Eurozone Composite index wars revised down to 55.2, from 55.3. February’s reading was at 57.1. Eurozone retail sales rose by just 0.1% month-on-month in February for a 1.8% year-on-year increase.

The pound is down on weak data on business activity in the services sector of the UK, with the GBP/USD pair reaching its lowest level since March 21 (1.4023). UK PMI services dropped sharply to 51.7 in March, down from 54.5 and missed expectation of 54.0. That’s the lowest level in 20 months. The PMI surveys collectively signal a quarterly GDP growth rate of just under 0.3%, down from 0.4% in the fourth quarter, albeit with the rate of growth sliding to just 0.15% in March alone.

Canada trade deficit widened to CAD -2.7b in February, from CAD -1.9b. Imports rose by 1.9% mom, 3.5% yoy to CAD 48.6b, with energy products leading the way. Exports increased by 0.4% mom, 1.5% yoy to CAD 45.9b.