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Exchange4free Global Forex Report (14/03/2018)

USD

The US Dollar encountered some difficulty during Tuesday’s session, supported by the latest inflation data which indicated a steady accelerated rise of 2.2% year-on-year. The US Dollar fell almost 0.24% against all major currencies, after President Donald Trump fired US Secretary of State, Rex Tillerson. Analysts are concerned that Tillerson’s departure could be a sign that the administration will soon initiate further protectionist policies and become more aggressive in negotiating trade relationships internationally.

Analysts and investors alike, will be keeping a close eye on the US and the trade negotiations, for further developments could increase the volatility of the Dollar. Currently the EUR/USD is trading around 1.23981.

EUR

During Tuesday’s session, the EUR/USD pair climbed, supported by upbeat growth forecast from the OECD (Organisation for Economic Co-operations and Development). The OECD upgraded their growth forecast for the Euro Zone, to 2.3% in 208 and 2.1% in 2019. The optimistic growth outlook was brought on by a strengthening global economy and growing investments, two elements that could potentially drive employment and trade higher within the Euro Zone.

Analyst say that the market will be focussing on anything tariff related in the US, with retaliatory measures from the EU or China. These measures are sure to cause volatility in the EUR/USD pair. Currently the pair is trading around 1.23981 down 0.13% from last week.

GBP

The Sterling rose to a two week high during Tuesday’s session as the US Dollar sold off after U.S consumer price inflation steadied and President Donald Trump fired U.S Secretary of State, Rex Tillerson. The Sterling rose half a percent on Tuesday, to reach a high of 1.3984 against the US Dollar.

As the US Dollar started to sell off, British Finance Minister, Philip Hammond, gave his half-yearly economic update, where he updated his growth forecast and trimmed his budget deficit expectations, which lead to the higher bounce of the Sterling. Hammond said that he expects Britain's economy to grow by 1.5% in 2018, up from 1.4% in November 2017. Currently the GBP/USD pair is trading around 1.39727, slightly lower than yesterday’s high of 1.3984.

AUD

The Australian Dollar came under pressure during Tuesday’s session, as it lost ground against all major currencies. The AUD/USD pair traded at 0.7856, down 0.20% from the previous session, as news of US Secretary of State’s replacement, Rex Tillerson, broke. The news weighed heavily on the Australian dollar, as investors viewed the replacement decision by US President Donald Trump, as negative.

The reports of Trump and the implementation of tariffs and trade restrictions against China, placed the Australian Dollar under more pressure, causing it to lose more ground against the US Dollar, sliding to a low of 0.7847. Currently the pair is trading in the region of 0.7877.

CHF

During Tuesday’s session, the Swiss Franc strengthened as the US Dollar started to depreciate amid political changes in the US. The pair was trading around 0.9477 at the end of Tuesday’s session.

The strength of the Swiss Franc is due to a rise in the demand of safe haven currencies, caused by political changes and global uncertainty surrounding the US. Swiss National Bank(SNB) Chairman, Thomas Jordan, will not want to jeopardize a weakening of the Swiss Franc during the SNB’s session on Thursday, and is more likely to wait for the European Central Bank to tighten their monetary policy, before the SNB decides on a course. Currently the USD/CHF pair is trading around 0.9438 compared to 0.95099 from last week.

ZAR

The Rand strengthened against the US Dollar during Tuesday’s session, after President Donald Trump fired Secretary of State, Rex Tillerson. The Rand was trading around 11.78 to the Dollar, up 0.36% from Monday’s session. The Rand barely reacted to local data, showing that manufacturing output rose 2.5% in January 2018, supporting views that the domestic economy kept the momentum from the start of the year.

The Rand has shown to hold steady against major currencies under new leadership, Cyril Ramaphosa. The change in the government, along with the hope of consistency in policy, has begun to lead to positive momentum for investments. However, analyst do advise caution, for the raised taxes, rising imports and continued drought may hamper and slow growth momentum. In the coming week, the focus will be on the mining and manufacturing data, where markets expect data to show an upward trend.Later this month, credit ratings agency, Moody’s, will give their review of South-Africa, and this can have a positive or negative impact on the Rand. Currently the Rand is trading around 11.7554 against the Dollar.

NGN

The Naira has remained relatively stable in the past 2 weeks against major currencies. It has been said that the stability of the currency could be owed to the positive growth in the nation’s external reserves.