logologologologo
  • Forex News
  • Forex Guides
  • Crypto News
  • Crypto Guides
  • Our Services
    • Travel Money
    • Forex Trading
    • Money Transfers
  • Contribute

Why Has the Dollar Corrected so Harshly against All Major Currencies?

Published by Forex News Shop Staff Forex News Shop Staff at March 19, 2019
Stock Market Graph next to a 1 dollar bill (showing former presi

Photo: corlaffra / Adobe Stock

The U.S Dollar (USD) has fallen against all the major currencies apart from the Japanese Yen after poor jobs growth from the month of February. Its been widely documented that Trumps administration has been in turmoil for the past 2 years and now with a continuing trade war with China, the pressure is being felt in the country’s currency. As it’s the world’s largest economy and what many emerging markets peg their currency against, the weakness is not to be ignored.

It doesn’t take a genius to predict the US economy has cooled dramatically because of the government shutdown. The political chaos and stubbornness over a campaign pledge with the funding of the proposed Mexican wall paired with the tightening of financial conditions at the end of 2018 all have had a compounding effect.

A combination of weakness in February’s US manufacturing output that came out last week wasn’t predicted. Economists and commentators, expect the Federal Reserve implement a rate increase this year, likely Q3.

USD Yahoo Finance graph

Photo: Yahoo Finance

U.S. Rates and Index

This will be linked to the above but disappointing industrial/manufacturing output data weighed on the U.S. 10 year and for only the second time this year closed 2.60% lower.

The Dollar Index feel lower for the fifth time in six sessions and seems to be on a technical downtrend compounding further pressure on the US dollar and highlighting more problems with the US economy.

Euro

The Euro fell its lowest level since the middle of 2017 near $1.1175 in early March. Attributed to the ECB and disappointing U.S. data and a greater risk appetite encouraged by Chinese stimulus measures helped lift the euro in four of last week’s five sessions. Technically, it should pull back to the $1.13-$1.15 trading range. Europe as a macroblock is cooling economically with both Germany and France touching on technical recessions but it hasn’t been viewed as the same economic problems as the USA.

Sterling

British Parliament was a circus last week as politicians rejected “no deal” and the Prime minister’s proposed deal. The rejection of the various deals on offer was welcomed by the markets and strengthened the pounds to $1.3380, its best level since June 2018. It spent the last two sessions consolidating and pulling back no lower than $1.3200. It closed firmly ahead of the weekend. Next week is crucial as another EU summit focusing on Brexit will take the attention over the Bank of England (BoE) meeting and employment, earning and retail data. If the pound breaks out and supported by good data it could touch $1.36.

Canadian Dollar

The Canadian dollar has been bipolar of late. In December, along with financial markets showed a contraction in the economy, a trade deficit nearly double to what analysts expected, and a February decline in existing home sales of -9.1%. The Bank of Canada has sat on the proverbial fence and there seem to be stark similarities between the two neighbours economically speaking. The oil is now relatively stable between $55 and $65 a barrel however

Australian Dollar

As we mentioned, the Australian economy has cooled significantly over a series of various global macro and domestic factors, the Aussie Dollar held support and $0.7000 and traded higher last week to reach almost $0.7100. Poor U.S jobs report because of the government shutdown helped against the USD.

Mexican Peso

It’s never a good sign when the strongest economy in the world falls against its poorer, local neighbour but it did. The dollar fell 1.5% against the Mexican Peso last week as it did other emerging market currencies. The charts and technical indicators warn of the risk of additional dollar losses in the coming days with support is seen around MXN19.12 and then at MXN19.00.

Oil

Delivery jumped 4.5% last week on a larger than expected drawdown of U.S. inventories, more and continued disruption in Venezuela and rumour of extension in OPEC cuts. Oil traded above $59 ahead of the weekend for the first time since mid-November. If the technical indicators are to be followed the price could break out to reach $67.

S&P 500

Financial markets (excluding currency) have had a strong 3 months after the flash bear market. It’s at a new four-month high to be precise and up 12.6% year-to-date. Low-interest rates and projections of nearly $1 trillion of share buybacks this year leave traders “going long” with the momentum of bullish sentiment. The record high from last September near 2940 is the real draw. It seems the bull run of 10 years+ is still on the cards.

Share
Forex News Shop Staff
Forex News Shop Staff
We cover foreign exchange, currency and cryptocurrency news and guides. Our readers can find currency-specific foreign exchange news, political updates affecting currency and insight into where foreign exchange trends may go, as well as the latest cryptocurrency analyses and trends.

Related posts

American dollars an Usa Flag.Close up of american flag and dollar cash money on old oak wood.

Photo: weyo / Adobe Stock

November 28, 2019

Dollar Weakens as Possibility of Trade Deal This Year Looks Unlikely


Read more
canadian money in a pocket of a blue jeans

Photo: dzianominator / Adobe Stock

November 11, 2019

Canadian Dollar Falls Further as Job Numbers Tumble


Read more
Composite image of stocks and shares

Photo: vectorfusionart / Adobe Stock

November 4, 2019

NFP Numbers Surpass Target but Manufacturing Stumbles as ISM PMI Falls


Read more

Latest News

  • smartphone with Facebook and Libra logo on the screen. Facebook is largest and most popular social networking site in the world. Moscow, Russia - June 28, 20190
    How Facebook’s Libra Could Affect Forex and Crypto Markets
    November 28, 2019
  • American dollars an Usa Flag.Close up of american flag and dollar cash money on old oak wood.0
    Dollar Weakens as Possibility of Trade Deal This Year Looks Unlikely
    November 28, 2019
  • canadian money in a pocket of a blue jeans0
    Canadian Dollar Falls Further as Job Numbers Tumble
    November 11, 2019
  • Composite image of stocks and shares0
    NFP Numbers Surpass Target but Manufacturing Stumbles as ISM PMI Falls
    November 4, 2019
  • House of Parliament and British flag0
    Pound Stagnant as Parliament Are Faced with Parliamentary Election
    October 30, 2019

Market Overview

ForexSignals.com sidebar blog widget

Topics

  • Foreign exchange news
  • Foreign exchange guides
  • Cryptocurrency guides
  • Cryptocurrency news

Our Services

  • Travel money deals
  • Forex trading platforms
  • International money transfers

Support

  • About
  • Contact
  • Advertise
  • Write for us
  • Privacy policy
  • Terms & conditions
  • Cookie policy
© 2018 Forex News Shop All Rights Reserved