US Dollar clings to recent gains as investors look for fresh triggers

NEW YORK (March 27) The US Dollar (USD) broadly consolidates on Wednesday, holding to recent gains and ending the losing streak for this week so far. Markets are not really seeing a main driver for the turnaround, so this move should be taken with a pinch of salt. This could result in the Greenback trading in a tight range until the release of important economic data later this week, namely the US Gross Domestic Product (GDP) on Thursday and the Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge, on Friday.

A very light US calendar is ahead on Wednesday, with only the Mortgage Bankers Association delivering its weekly Mortgage Applications for this week. Markets will be able to hear from a Fed official as Fed Board Member Christopher Waller will deliver a speech about the US Economic Outlook at the Economic Club of New York. Known for being a hawk, any change in the number of interest-rate cuts or timing could be important for the Greenback’s valuation.  

Daily digest market movers: Hawk Waller main event

• The Mortgage Bankers Association has released the weekly Mortgage Applications Index for this week at 11:00 GMT. The previous number showed a 1.6% contraction compared with a week earlier, and this week was no different with a contraction by 0.7%.
• The US Treasury is issuing another bond, this time in the 7-year tenor at 17:00 GMT. 
• Fed Board Member Christopher Waller will speak about the US Economic Outlook at the Economic Club of New York around 22:00 GMT.
• Equities are overall in the green, except for China, where both the Hong Kong Hang Seng Index and the Shenzhen Index have retreated over 1%. European and US equities are in the green by 0.25% on average. 
• According to the CME Group’s FedWatch Tool, expectations for the Fed’s May 1 meeting are at 88.3% for keeping the fed funds rate unchanged, while chances of a rate cut are at 11.7%.
• The benchmark 10-year US Treasury Note trades around 4.23%, a touch softer from Tuesday’s high at 4.27%.

FXStreet