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Weekly Roundup: US dollar weakens in risk-on trade

currency-newsWeekly Roundup: US dollar weakens in risk-on trade
The US dollar spent most of last week’s session on the defensive as positive risk appetite undermined demand for the safe-haven currency.

These risk-on flows were underpinned by hopes for a negotiated end to the war in Ukraine, amidst suggestions a deal could be found ‘within days’.

The middle of the week was then dominated by the Federal Reserve as it concluded its March policy meeting by delivering its first interest rate hike since 2018.

Despite also signalling plans to raise interest rates up to six more times in 2022, the US dollar maintained a bearish trajectory following the decision, suggesting USD investors had already priced in the Fed’s plans to accelerate its tightening cycle.

The latter half of the week then saw the US dollar begin to claw back some of its losses amidst a reversal in market risk appetite.

The publication of the latest US durable goods orders release will be the most high-impact USD data release this week.

A contraction in sales growth last month could exert some pressure on the US dollar in the latter half of the week.

Otherwise the ‘greenback’ is likely to remain sensitive to market risk appetite. At the start of the week this could see USD exchange rates bolstered by market jitters amid fresh uncertainty over the conflict in Ukraine. 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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