FX markets remain gripped by fears about the growth-negative impact from the trade policies of the Trump administration. Investor worries continue to weigh on global stock markets, bond yields and commodity prices. The USD has been able to regain some ground vs G10 risk-correlated currencies but struggled to perform vs other liquid, safe-haven currencies like the JPY, CHF and EUR. We believe that the overhang of unhedged risk-correlated USD positions has hurt and could continue to erode the appeal of the high-yielding, safe-haven King of G10 FX.
On the day, focus will be on the ADP and services ISM data for February. Ahead of the releases, we and market consensus expect private payroll gains to slow down notably while business confidence in the services sector should soften compared to January. In the case of the latter, FX investors would also focus in particular on its employment and prices-paid sub-components keen to see whether, similar to the manufacturing ISM on the Monday, the data gives off ‘stagflationary’ vibes. Also today, focus would be on the Beige Book – that will inform the outcome of the March FOMC policy decision – as well as any additional tariff tape-bombs from President Donald Trump.
Turning to the FX market impact, the USD-smile template could continue to hold with any further spike of market risk aversion lending support to the currency and any further drop in US rates and yields undercutting the USD. With some Fed- related negatives already in the price of the currency, however, we think that it would take meaningful negative US data surprises (especially the employment indicators) of the to see the USD extending its losses vs its fellow safe-havens. At the same time, stronger-than-expected data could give help the USD regains some lost ground vs the JPY and CHF.
On the day, focus will be on the ADP and services ISM data for February. Ahead of the releases, we and market consensus expect private payroll gains to slow down notably while business confidence in the services sector should soften compared to January. In the case of the latter, FX investors would also focus in particular on its employment and prices-paid sub-components keen to see whether, similar to the manufacturing ISM on the Monday, the data gives off ‘stagflationary’ vibes. Also today, focus would be on the Beige Book – that will inform the outcome of the March FOMC policy decision – as well as any additional tariff tape-bombs from President Donald Trump.
Turning to the FX market impact, the USD-smile template could continue to hold with any further spike of market risk aversion lending support to the currency and any further drop in US rates and yields undercutting the USD. With some Fed- related negatives already in the price of the currency, however, we think that it would take meaningful negative US data surprises (especially the employment indicators) of the to see the USD extending its losses vs its fellow safe-havens. At the same time, stronger-than-expected data could give help the USD regains some lost ground vs the JPY and CHF.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
1. AccuTrade System:
tradingview.com/v/yDFPnb1J/
2. Signal Performance:
thedailyfx.com/performance/
3. Best Forex EA:
thedailyfx.com/beetle-ea/
4. Free Forex VPS:
myfxvps.com/get-it-free/
tradingview.com/v/yDFPnb1J/
2. Signal Performance:
thedailyfx.com/performance/
3. Best Forex EA:
thedailyfx.com/beetle-ea/
4. Free Forex VPS:
myfxvps.com/get-it-free/
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.