In their March 2018 Currency Outlook report, Tempus, an exchange rate and global payments company, provides a detailed report including the following topics and sections:

In Brief

• The USD recovered by 1.5% according to the Bloomberg Dollar Spot Index
• Among the G-10, the Canadian Dollar fell the most, 4.6%
• The Japanese Yen gained 2.5%, reaching its highest level since 2016
• Global markets saw risk-aversion and volatility with concerns over higher borrowing costs

In Focus
Brexit process renders the British Pound down 3.8%

The View – As Markets Sour, the USD Enjoys Gains

• Easing measures that allowed for markets to recover after the financial crisis are coming to an end.
• Stock indexes reacted poorly to the plan for an end to the aid in the form of monitory policy.
• New head of the Fed, Jerome Powell, gave renewed confidence in the Fed’s outlook in his testimony to congress, driving the USD higher.
• Better than expected US retail sales  and inflationary growth as Consumer Price Index is growing to a level for which the Fed has hoped.
• Inflation in Europe is reaching 1.2%, below the 2% for which the European Central Bank had hoped.
• The EU added pressure to Prime Minister May to accept their suggestion of a softer exit, while the conservative party pushes for a tougher agenda.
• The EU stands firm that if the UK exits, it will suffer extreme economic consequences if it does not stay within EU law for the initial period.
• There is uncertainty over the USD’s depreciation if the US adds a planned 25% tariff on steel imports and 10% on aluminum.

IBC Members can download the complete Currency Outlook from the members-only section of the IBC website under the Special Reports section.  IBC membership is free for all regular IHA members – to learn more and to join, visit the IBC membership information page.