Just a Tweet Away
The week ahead will prove to be light on the data front. There is still the possibility of some data surprises coming from US growth and EU inflation on Thursday and Friday respectively. However, by and large the FX market will have to take its direction from elsewhere this week. Despite a stunted recovery in the US Dollar on Friday, the Dollar index still recorded its third consecutive week of losses.
Some of the weakness that is emerging in the US Dollar is undoubtedly a result of an unwinding of Dollar longs that characterised January. In turn, it is highly likely that a discount to the threat of tariffs is at least partially responsible for this rotation away from the greenback. As a result, tariff risks are likely being underpriced. We can see evidence of this eroding or missing risk premium in currencies other than the Dollar also.
Those currencies at high risk of depreciation should President Trump’s reciprocal tariffs materialise include the Euro, Brazilian Real, Indian Rupee, Thai baht, Canadian Dollar and Mexican Peso to name but a few. There is little to no discernible risk premia evident within the valuations of such currencies that would be attributable to tariffs. The decision to delay the imposition of tariffs on China and Mexico took place on 4th February and offered an extension of 30 days. With that deadline moving into focus in just one week’s time, USDCAD and USDMXN both trading at what is to date the month’s lows which means they could face buying interest.
Discussion and Analysis by Charles Porter
Related Insights
Daily Brief – Questioning Truth
Humphrey Percy
Tue 24 Mar 2026
Questioning Truth Adopting the same handle as his now rather redundant X account, @realDonaldTrump shocked markets yesterday using his own social media platform, Truth Social. During Trump 1.0, the legitimacy of a President using an unofficial X, then Twitter, account was questioned. Now under Trump 2.0, it’s seldom questioned when he is the majority shareholder […]
Daily Brief – On course for Warsh?
Charles Porter
Thu 19 Mar 2026
On course for Warsh? The latest Federal Reserve decision concluded last night. Mirroring the prior decision, the FOMC voted to keep policy rates on hold within a band of 3.5-3.75%. Ordinarily, yesterday’s meeting could have been a lesser-event. After all, with the arrival of Chair Jay Powell’s successor on May 15th, this could have been […]
Daily Brief – Where’s the Beta
Charles Porter
Thu 12 Mar 2026
Where’s the Beta Amongst FX, there exist currencies known as ‘commodity currencies’. This isn’t a fixed basket of currencies, however, particular candidates spring to mind when the group are mentioned. The foremost amongst the G10 are the Canadian, Australian and New Zealand Dollars. These currencies are so-called because they typically exhibit a positive correlation with […]
