The first quarter has drawn to a close and there have been some very big swings over the last couple of months. When you look on the surface, you’ll soon see that the Yen is the highest performer. This currency was able to soar way above all other currencies and it gained a huge amount in value. This is currently being listed at 5% and this is against the US dollar. Its strength was incredible against currencies such as the Canadian dollar and the Australian dollar.
AUD/JPY and CAD/JPY were both at their weakest levels over the last year. If you look at the initial decline, you’ll see that it started out in January and then quickened through February. This is around the time when US stocks began to peak before moving lower. There have been a lot of big stories in this quarter alone but one of them was in fact the end of the bull market. As stocks began to fall, investors did not really put everything in US dollars. Instead, they opted for sterling and euros and this is all because of the uncertainty that comes from the current US policy. When you look at the worst performers, you’ll quickly see that Canadian dollars and even Australian dollars are among the top currencies. The loonie was also hit by various incoming concerns from the NAFTA. Some dovish comments also came from the Bank of Canada. With there being a continuous level of trade tension between the US and China, it is safe to say that this contributed to the amount of unevenness in terms of the dollar.
Markets are said to be especially quiet due to the Easter period and US stocks rebounded on Thursday as well. Normally this would show signs of strength, but nothing has translated since. A large part of this is probably down to the month and even the quarter end flows. The latest economic reports have also dropped to the lowest possible level in terms of jobless claims and it has not reached this level since 1973. Personal income and even spending growth have met expectations, yet when you look at manufacturing activity in the Chicago region, it isn’t hard to see that this has slowed down much more than expected.
Another interesting thing to know is that the EUR/USD has sold off for three days straight. The latest decline has really taken both currencies below the 20-day and the 50-day MA. This is incredibly significant because it ultimately means that it could move down to 1.22. The sell-off really was triggered by softer consumer price growth in Germany. When you look at the ECB, you’ll find that it is going to be very hard to change, but in a year over year comparison, you’ll see that Germany has gone from 1.4% to 1.6%.