Dollar Erases Fed Losses, Pound Drops Ahead of BOE
The greenback rose versus all Group-of-10 peers as European stocks edged lower while the pound fell ahead of the Bank of England’s policy rate decision.
The Bloomberg Dollar Spot Index rises by as much as 0.4% to erase losses fueled by the Fed’s decision Wednesday as risk-off sentiment takes over
US president Donald Trump said the Federal Reserve should cut interest rates, splitting with the US central bank as officials weigh the economic cost of his tariff push
Theme of leveraged euro and pound selling versus the dollar after the London open remains intact this week, a Europe-based trader says; as April 2 tariffs come closer, dollar-shorts are unwound, another trader in the region says
EUR/USD drops as much as 0.6% to 1.0839, lowest in nearly a week; one-week risk reversals rally to 40bps, puts over calls, the most bearish sentiment for the common currency since March 4
President Christine Lagarde said the European Central Bank is unable to make firm commitments on interest rates due to elevated unpredictability over trade
GBP/USD down 0.4% to 1.2946; the Bank of England is likely to turn less dovish on Thursday as officials start to fret about the fallout from Donald Trump’s tariff wars and a renewed bout of domestic inflation
Market participants may wind back pricing for May cut if the BOE is concerned about still too high wages growth, Joseph Capurso, head of international economics at Commonwealth Bank of Australia, writes in a note
EUR/CHF falls as much as 0.4% to 0.9531 before briefly reversing losses after the Swiss National Bank cut its interest rate to the lowest since September 2022 and declared another reduction is less likely for now
Pair rises to 0.9583 high before steadying around 0.9560
EUR/SEK rallies by 0.4% to 11.0589, highest since March 14; Sweden’s central bank kept its benchmark rate unchanged at a two-year low and reiterated it’s finished with the easing cycle.
AUD/USD plummets by 1.1% to 0.6287; Australian employment surprisingly dropped in February, sending the currency and government bond yields lower as traders boosted bets on further interest-rate cuts this year
USD/CAD up a third day, gains 0.4% to 1.4385; Canadian Prime Minister Mark Carney is poised to call a snap federal election on Sunday for an expected vote on April 28, the Globe and Mail reports
Some information comes from FX traders familiar with the transactions who asked not to be identified because they aren’t authorized to speak publicly.
Source: Bloomberg
