The Australian dollar has declined by 0.37% on Wednesday and is trading at 0.6320 in the European session. AUD/USD is down for a fourth consecutive trading day and has lost 1.2% during that time.
The Japanese yen is slightly lower on Wednesday. In the North American session, USD/JPY is trading at 149.25, up 0.16% on the day.
European currencies remain reasonably supported and are taking the Ukraine mineral agreement as a positive and very possibly some kind of move towards a US security guarantee.
FX Daily: Refocus on fiscal proving dollar supportive. The dollar has found a little support overnight after the House passed a budget blueprint bill laying the groundwork for President Trump's tax-cutting agenda. The focus on fiscal might buy a little time for the dollar and distract from weaker consumer activity until the tariff agenda comes back into focus next week. USD/CAD is now the epicentre of tariffs
After a very quiet week, the local story is back in focus for markets. Today, we will see retail sales in Poland for January. Goods spending remains subdued, but has improved after a poor third quarter.
The UK published on Friday data showing a net public sector surplus of £15.4bn in January, which fell short of the £20bn estimated by the Office for Budget Responsibility in October alongside the Budget.
The German election results were broadly in line with opinion polls. The CDU/CSU is the leading party with 29%, followed by the far-right AfD at 21% and the SPD at 16%.
Germany voted over the weekend, and the results are broadly in line with expectations. The euro got a small boost from the CDU/CSU being able to form a coalition only with the SPD, without any smaller third party. There’s a lot on the table for markets this week, and we expect plenty of noise in FX.
For the first time in a while, most of the major currencies traded in tight ranges last week, with the exception of the yen, which continues to rally amid rising expectations for a faster pace of Bank of Japan policy
The dollar has given up all its gains for the week as soft data and US earnings seem to be casting doubts on the notion of US exceptionalism. The yen is the big winner, receiving extra help from hawkish inflation data overnight. We wouldn’t chase the dollar decline much further, though
