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By xemarketanalysis February 20, 2018 2:03 pm
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    XE Market Analysis: US Dollar Adds to Gains

    OVERVIEW

    • USD trading broadly higher.
    • GBP higher on a report that the EU parliament will allow 'privileged' access to the single market.
    • CAD weaker after dropping in wholesale trade.
    • EUR softer after a drop in German ZEW survey.
    • AUD flat after RBA minutes signal rates to remain on hold.
    • SEK falls sharply after inflation miss.

    HIGHLIGHT

    The US Dollar is continuing its recovery from a three-year low hit last week with the Dollar index up 1.6% pointing towards a correction for the world's reserve currency. Focus on the markets over the remainder of the week in terms of US releases will be mainly on tomorrow’s FOMC minutes. 

    US DOLLAR

    The Dollar is broadly higher today (see highlight).

    BRITISH POUND

    The Pound is broadly higher (with the exception against a stronger US Dollar), following a report this morning that the European Parliament is planning to call for the UK to have a 'privileged' single market access post-Brexit and a more flexible approach in future relationship talks. If confirmed, that would be quite a shift in the EU's stance which until recently, was very much against special access for the UK once it leaves the EU. Meanwhile, Brexit secretary David Davis gave a speech that was focused on the UK's plans to remain aligned with the EU on various trade and regulatory areas, charting an agreeable path for the future relationship.

    EURO

    The Euro is lower today, with Germany’s ZEW survey showing investor sentiment fell in February in the wake of the recent market volatility. The current situation index dipped to 92.3 from 95.2 in January but suggests the economy retains solidly positive momentum, and the index does not really dampen the near-term outlook for growth.

    CANADIAN DOLLAR

    The Canadian Dollar is down 0.5% versus its US counterpart, heading back towards its monthly low of 1.27 after the value of Canadian wholesale trade dipped 0.5% in December, versus expectations for a 0.4% increase. November's month-on-month gain was also revised down to 0.3%, from an initial 0.7%.

    AUSTRALIAN DOLLAR

    The Australian Dollar is flat after the minutes from the RBA's last meeting signaled a steady path for interest rates this year. The minutes showed policymakers had become more confident about the domestic outlook thanks in part to a synchronized upturn in the global economy, but than a pick-up in wage growth was necessary to ensure a much-needed recovery in inflation. 

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