March 2020 Currency outlook - Market insight into global currencies
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USD
CAD
GBP
EUR
CHF
March 2020 PLN
CZK
Currency outlook AUD
Market insight into global currencies
JPY
CNY
NZD
SGD
MXNUSD
USD
By Joe Manimbo, Currency Strategist – North America
CAD
March events February review March risk events and key themes GBP
The U.S. dollar strengthened to April 2017 highs as China’s The dollar’s spike showed few signs of abating anytime
02 ISM manufacturing
deadly virus dampened global growth prospects and left some soon. But sooner or later the buck’s tide could turn. Eventual
Mon index
of the world’s biggest economies at greater risk of recession. containing of the coronavirus could check the dollar’s safe
EUR
06 Nonfarm payrolls
A broad burst of strength catapulted the greenback to three- haven-inspired gains. Moreover, increasingly accommodative
Fri and-10-month highs against sterling and the yen, and to its global central bank policy should help to put Asia and Europe
highest in three-and-11 years against the euro and Australian on a better growth path, potentially alleviating selling pressure
11 CPI dollar respectively. The dollar enjoyed safe haven flows and on their currencies. CHF
Wed capitalized on favorable growth differentials against many y A reduction in downside risks facing global growth could
peers like the euro and yen.
12 check the dollar’s rise.
Thu
PPI
y Japan and Germany appeared at growing risk of recession y A strong dollar in the past has invited White House attempts PLN
following alarmingly weak data. to jawbone it lower.
17 Retail sales y Investors piling into America’s booming stock market also y The dollar index year-to-date has gained about 3.5%.
Tue
benefited the greenback. CZK
18 FOMC meeting y Low unemployment and elevated consumer morale
Wed
suggested America’s record long expansion had further Source: Reuters, 2018
26 GDP Q4 final
room to run.
AUD
Thu
27
Fri
Personal spending
JPY
Economic data EUR/USD (12 months) CNY
1.15
Base Rate: 1.50-1.75%
GDP: 2.1% 1.13 NZD
Inflation: 1.6% 1.11
Unemployment: 3.6% 1.09 SGD
Trade Balance: -$48.9 Bn 1.07
M A M J J A S O N D J F
MXNCAD
USD
By Joe Manimbo, Currency Strategist – North America
CAD
March events February review March risk events and key themes GBP
Canada’s dollar fell into a deeper hole, its biggest in four Developments at home and abroad hold the keys to the
02 Manufacturing PMI months, as China’s deadly coronavirus roiled markets and cast a Canadian currency’s coming prospects. Further signs of a
Mon
cloud over the global economy. Canada’s buck has fared mixed moderating Canadian economy would strengthen the case for
EUR
04 Bank of Canada but mostly weaker this year, partly attributed to the Bank of an insurance rate cut by the Bank of Canada. Lower lending
Wed announcement Canada opening the door to a rate cut if the economic fragility rates are typically synonymous with a weaker currency given
persisted. The nation’s job market remained on solid ground its diminished yield appeal. The longer run horizon appears
06 Employment with unemployment at a low 5.5%. But manufacturing sales brighter for Canada as copious amounts of global central CHF
Fri contracted for the fourth month in a row, a cautious signal for bank stimulus bodes bullishly for global growth.
fourth quarter growth.
09 y The odds of Canada cutting rates on March 4 stand at
Mon
Housing starts
y Concerns that the coronavirus would crimp economic around 14%. PLN
activity weighed broadly on currencies with close ties to y While stronger, USDCAD has largely remained rangebound.
18 CPI global growth.
Wed y Two-thirds of the way through the first quarter, USDCAD has
y Oil waned below $50, a 1-year low, only to wax, a move appreciated by about 2%. CZK
20 Retail sales
that allowed Canada’s commodity-driven currency to trim
Fri its losses.
23 Wholesale trade
y Interest rate markets assign about a 40% chance of the
Bank of Canada cutting rates as soon as April.
AUD
Mon
31
Tue
GDP
JPY
Economic data USD/CAD (12 months) CNY
1.37
Base Rate: 1.75%
GDP: 1.3% 1.35 NZD
Inflation: 2.4% 1.33
Unemployment: 5.5% 1.31 SGD
Trade Balance: -C$0.40 Bn 1.29
M A M J J A S O N D J F
MXNGBP
USD
By George Vessey, Currency Analyst – United Kingdom
CAD
March events February review March risk events and key themes GBP
The major surprise of the month emanated from PM Boris The UK and EU officially begin trade negotiations this month,
04 Final services PMI Johnson’s cabinet reshuffle. Sajid Javid resigned and Rishi meaning the pound will be sensitive to related headlines.
Wed
Sunak was appointed the new Finance Minister, paving There is still a chance the UK could leave the EU without
EUR
11 GDP
the way for a more expansionary UK Budget. Sterling a trade deal at the end of this year, which could wipe a
Wed strengthened against all its peers, but gains were limited as significant chunk off sterling’s value. Also on the radar is the
the war of words between London and Brussels prompted release of the new UK Budget. Signs of looser fiscal policy
11 Spring Budget pessimism about the future trading relationship after Brexit. could send sterling higher in anticipation of a boost to UK CHF
Wed economic growth and a decreasing need for a Bank of
y UK wage growth continues to outpace inflation and
England (BOE) rate cut. Andrew Bailey leads his first monetary
17 unemployment is pinned near 45-year lows.
Tue
Average earnings
y Sector activity remains strong, despite the expected
policy meeting as the new BOE Governor later this month.
PLN
adverse economic impact of the coronavirus globally. y As well as key macroeconomic data throughout the month,
24 Flash PMIs the pound will also be sensitive to coronavirus updates and
Tue y GBP/EUR notched fresh two-month highs near €1.21 before any impact on overall market sentiment.
running out of steam. GBP/USD continued to oscillate within CZK
25 Inflation (CPI) its familiar 2-month trading range, unable to break out y If the pound strengthens then GBP/USD could climb towards
Wed
higher or lower. $1.32 again, its two-month trading top, whilst GBP/EUR may Source: Reuters, 2018
challenge new three-year highs above €1.21.
26 Retail sales y Conversely, if the mood sours, GBP/USD could test the lower
AUD
Thu
end of this range again. Multiple daily closes below $1.29
26 could send this currency pair back towards $1.27.
Thu
BOE rate decision
JPY
30 Consumer confidence
Mon
Economic data GBP/USD (12 months) CNY
1.35
Base Rate: 0.75%
GDP: 1.1%
1.30
NZD
Inflation: 1.8%
Unemployment: 3.8%
1.25
SGD
Trade Balance: -£7.72 Bn 1.20
M A M J J A S O N D J F
MXNEUR
USD
By Guillaume Dejean, Currency Strategist – Europe, Middle East, Africa
CAD
March events February review March risk events and key themes GBP
The euro plummeted to a three-year low against several of its Although the ripple of the coronavirus on the Eurozone
03 Official start of EU-UK
developed peers amid coronavirus concerns. Germany with economy has turned out less damaging than anticipated,
Tue post-Brexit talks
its export and industrial-oriented model is first in line as a the economic outlook in Europe remains bleak. While a rapid
EUR
03 Flash CPI
potential casualty of the sanitary crisis that weighs on demand slowdown of the Covid-19 outbreak in China could help euro to
Tue and supply from the second largest economy. A potential recover modestly, further deterioration and German recession
postponement of the Eurozone recovery scenario could force concerns could cause the currency more pain. Investors will
03 Unemployment rate central bankers to maintain an accommodative stance, or continue to monitor the impact of the coronavirus in Europe, CHF
Tue possibly consider further rate cuts into negative territory if the keeping a close eye on the behavior of the European Central
situation downgrade and a recession risk gains credit. Bank toward this threat.
04
Wed
Retail sales
y The German economy was steady in Q4, while a contraction y The stance of the ECB toward the coronavirus could PLN
was confirmed in France and Italy. deliver some indices on future actions and any new
12 ECB rate decision y The weakness of the Eurozone’s industrial sector suggests accommodative steps. A cut of growth forecasts could
Thu
pave the way to new losses for the euro.
vulnerability to coronavirus downside effects. Some CZK
17 ZEW sentiment index German automakers warned against significant losses in y The start of post-Brexit trade talks with UK will be a key
Tue (Germany) China as factories close. event this month, and eyes will also be kept on potential US Source: Reuters, 2018
penalties on the Airbus/Boeing conflict.
24 Flash PMI
y The euro slid to its lowest level since April 2017 against the
US ($1.08) and Canadian dollar (C$1.43) and its lowest level y The euro’s low valuation won’t avoid new pullbacks if the
AUD
Tue
since 2015 against the Swiss franc (₣1.06). Eurozone continues underperforming against its peers.
26 European Council A better global outlook would however give the currency
Thu (26-27 March) some fresh air to rerate modestly. JPY
31 Flash CPI
Tue
Economic data GBP/EUR (12 months) CNY
1.21
Base Rate: 0.0%
GDP (annual growth): 0.9%
1.18
NZD
1.15
Inflation (annual growth): 1.4%
1.12
Unemployment: 7.4%
1.09
SGD
Trade Balance: €22.2 Bn 1.06
M A M J J A S O N D J F
MXNCHF
USD
By Boris Kovacevic, Currency Strategist – Central and Eastern Europe
CAD
March events February review March risk events and key themes GBP
The spread of the Coronavirus is starting to affect the March will bring two major themes for the Swiss franc, that could
03 GDP global supply chain and broader economy and taking its make or break the recent upward trend against the European
Tue
toll on risk-related currency pairs in emerging markets. The common currency. Will the coronavirus spread further and how
high could a potential disruption of the global economy pull the
EUR
04 CPI
induced market uncertainty has opened the door for further
franc? This question will be of significant relevance for the Swiss
Wed appreciations of the technically already overbought Swiss
franc and has led the currency to a new four-year high national bank, which is trying to cope with the rise of the domestic
09 Unemployment rate against the euro. The recent downtrend of EUR/CHF has currency threatening the already weakened exporting industry. CHF
Mon been amplified by weak European data suggesting no rapid y Money Markets are currently only seeing a 20% chance of
recovery of the continents industrial sector in sight. an interest rate cut in Switzerland. This would be the first
19
Thu
SNB Policy Rate
y The Swiss manufacturing sector failed to take the positive
rate stimuli since 2015.
PLN
momentum from last year and is set back by the uncertainties y Given the low expectations of an interest rate cut, attention
30 KOF indicator regarding the coronavirus. The purchasing manager index will turn to signs of potential interventions through the
Mon currency market. The US treasury has put Switzerland back
for Switzerland falls from 48.8 to a value of 47.8.
on the list of countries manipulating its own currency. This CZK
31 Retail sales
y Small upticks in the risk sentiment on some days in February
could make a Swiss FX intervention a political issue.
Tue have not led to corresponding sell-offs of the Swiss franc, Source: Reuters, 2018
suggesting an underlying support for the currency. y There is no sign of a significant increase in speculative
y EUR/USD is characterized by a negative dynamic as long as
positioning against the EUR/CHF suggesting that market AUD
participants are not testing the will of the SNB to intervene
the pair is stationed below the current technical resistance in the markets. This could be a negative sign for the euro,
level at 1.0810. given that speculative flows could start building, if the
coronavirus does not fade into the background. JPY
Economic data GBP/CHF (12 months) CNY
1.35
Base Rate: -0.75%
GDP: 1.1% 1.30 NZD
Inflation: 0.2% 1.25
Unemployment: 1.1% 1.20 SGD
Trade Balance: – 1.15
M A M J J A S O N D J F
MXNPLN
USD
By Boris Kovacevic, Currency Strategist – Central and Eastern Europe
CAD
March events February review March risk events and key themes GBP
After a strong performance in the fourth quarter of last year, The question of how the Polish central bank will react to the
02 Markit manufacturing
the zloty has found it difficult to keep the pace going for much ever-growing domestic inflationary pressures will take center
Mon PMI
longer. Since January, the Polish currency has pulled back
from the two-year high against the euro and is now positioned
stage in March. Money markets are currently pricing in an 84%
EUR
04 NBP Interest rate
around the long-term weekly trend at 4,30 zl. In particular,
chance of no change in interest rates at the next monetary
Wed decision meeting on the 4th of March. Besides a fresh patch of data
decline in the Polish and German manufacturing sectors has releases for the Polish economy, regional investors will keep
13 CPI
started to impact the positive outlook for the largest central an eye on any developments regarding the coronavirus. A CHF
Fri European economy. A general risk-off sentiment concerning continuing spread of the disease would further deepen the
the spread of the coronavirus is also influencing regional current crises of the global supply chain and could result in
18 Corporate sector currencies and is overshadowing the neutral position of the
Wed wages Polish monetary authorities.
risk-off flows negatively impacting the zloty.
PLN
y The Polish presidential election is coming up in May and will
y Polish Inflation accelerated in January and found a
19 Industrial output new seven-year high at 4,4% yearly growth. This could
slowly turn the focus to consumer-based data like the release
Thu
of the consumer confidence, retail sales and wage growth.
discourage potential talks within the Central Bank to cut CZK
20 Retail sales
rates to support a slowing economy. y The Polish economy and in turn the zloty are in danger
Fri of being impacted by the downturn in the domestic and Source: Reuters, 2018
y Polish corporate sector wages have risen by an annual 7,1%
global manufacturing industry. German PMIs should enjoy
in February and were above analysts’ expectations.
significant attention from regional investors. AUD
y The current economic picture for Poland remains mixed,
given that the manufacturing PMIs have not shown signs of y The central bank in Poland is not expected to change the
improvement and retail sales fell below economists forecast current interest rate trajectory but could start to classify the
of 6,7%, having only grown 5,7% in February. recent inflationary rise as a short-term threat to its outlook. JPY
Economic data USD/PLN (12 months) CNY
4.05
Base Rate: 1.5%
GDP: 3.1% 3.95 NZD
Inflation: 4.4% 3.85
Unemployment: 5.2% 3.75 SGD
Trade Balance: – 3.65
M A M J J A S O N D J F
MXNCZK
USD
By Boris Kovacevic, Currency Strategist – Central and Eastern Europe
CAD
March events February review March risk events and key themes GBP
The interest rate hike of the Czech national bank (CNB) February’s rate hike has shown that the CNB values its
02 Purchasing Manager
has probably been one of the largest surprises in currency credibility of protecting the inflation target higher to prevent
Mon Index markets so far this year. In an unexpected move, the CNB a potential economic slowdown. Given that the decision was
decided against arguments for a constant rate like the slowing made with a narrow majority (4:3), markets do not expect any EUR
03 GDP domestic economy and external turbulences surrounding the rate change in March. Even with a full economic calendar
Tues spread of the coronavirus. This clearly showcases the ultimate for the Czech economy, focus will inevitably shift to global
mandate of the monetary authorities and the will to tame
09 Unemployment inflationary pressures, currently at seven-year highs. For now, it
factors, with the coronavirus taking the centre stage. The
current interest rate differential between the Eurozone and
CHF
Mon seems like the hiking cycle has ended, which shifts the question the Czech Republic could stop a sell-off of the Crown. Without
to whether the bank will remain constant or show itself forced
a slowdown of the coronavirus, and the overbought position of
10 to cut rates to compensate the slowdown in global trade.
Tues
CPI
y The Czech national bank hikes its benchmark interest rate
the Central-European currency pair EUR/CZK, the Crown could
still be vulnerable to depreciation.
PLN
25 basis points to 2.25%, a ten-year high. What follows is an
12 Industrial production acceleration of the already strong Czech crown, which finds
y Markets don’t expect further interest rate increases for 2020.
Thu The key now is how the CNB will respond to the ever-growing
a seven-year high against the common European currency.
threat of the coronavirus impacting the domestic economy. CZK
13 Retail sales
y The purchasing manager index for the manufacturing
y EUR/CZK has re-gained some of the losses from the last two
Fri sector has started ascending from the ten-year low and Source: Reuters, 2018
has found an eight-month high against the backdrop of an months, but is still displaying negative tendencies below
26 CNB Repo Rate
improving overall manufacturing recovery. 25.41 Kč AUD
Thu y USD/CZK has bounced back from the lower bound of the
y Domestic wage growth remains elevated, even with the
marginal uptick of the unemployment rate from 2.9% to 3.1%. current upward-channel and is now targeting 23.70 Kč.
This in turn has fuelled inflationary pressured and has led the
consumer price index to increase 3.6% annually in February. JPY
Economic data USD/CZK (12 months) CNY
24.0
Base Rate: 2.25%
GDP: 1.7% 23.5 NZD
Inflation: 3.6% 23.0
Unemployment: 3.1% 22.5 SGD
Trade Balance: – 22.0
M A M J J A S O N D J F
MXNAUD
USD
By Steven Dooley, Currency Strategist – Asia Pacific
CAD
March events February review March risk events and key themes GBP
The AUDUSD plunged to the lowest level since March 2009 last The likely consequences of both the bushfire crisis and
03 RBA decision month as the impact of the deadly coronavirus hit sentiment coronavirus saw many economists downgrade forecasts for
Tue
towards the local currency. March-quarter economic growth.
EUR
04 GDP A stronger US dollar, boosted by its relatively high interest Some forecasters fear that Australian economic growth might
Wed rates and safe haven appeal, also pressured the AUDUSD pair. even slip into the negative. The impact, however, might be only
05 Trade balance
y The AUD is traditionally tied to expectations for commodity short-lived.
CHF
Thu demand. The reduced activity in Chinese factories is a The Aussie was also hit by a weakening in the local employment
worrying sign. market with the unemployment rate climbing from 5.1% to 5.3%.
06
Fri
Retail sales y Apart from the commodity story, the AUD might also be
pressured by a fall in Chinese traffic into the education and
The RBA has said it aims for an unemployment rate at 4.5%.
The bad news from employment saw markets increase
PLN
17 RBA minutes
tourism sectors. expectations for an RBA rate cut.
Tue y The RBA next meets on 3 March.
CZK
19 Employment
Thu Source: Reuters, 2018
AUD
JPY
Economic data AUD/USD (12 months) CNY
0.72
Base Rate: 0.75%
GDP: 1.7%
0.70
NZD
Inflation: 1.8%
Unemployment: 5.1%
0.68
SGD
Trade Balance: AUD5.2 Bn 0.66
M A M J J A S O N D J F
MXNJPY
USD
By Guillaume Dejean, Currency Strategist – Europe, Middle East, Africa
CAD
March events February review March risk events and key themes GBP
The yen had a roller-coaster month on the back of market Yen volatility will likely be driven by the evolution of risk-on/
02 Final manufacturing
moodiness around the coronavirus outbreak. However, risk‑off sentiment toward the coronavirus and its economic
Mon PMI
multiple signs suggesting the spread of the virus could run out impact. Investors will remain sensitive to news flow about the
EUR
09 Q4 GDP revision
of steam by end of the quarter caused a restless rally of equity spread of the outbreak, and macroeconomic readings of the
Mon markets across the globe and paved the way for a broad damages caused by the crisis. However, if equity markets
correction of the Japanese currency. Growing concern about continue performing well, upside risks for the Japanese currency
18 Trade balance the health of the Japanese economy after a VAT hike last will remain capped. This is especially true against the US dollar CHF
Wed October and ripple effects from its close trade links with China and UK pound as both offer higher yields than the yen and can
also weighed on valuation of the yen. rely on good fundamentals in a distressed market environment.
19
Thu
BOJ rate decision
y The Japanese economy contracted by -1.6% in Q4, its lowest y The fluctuation of the Japanese currency could remain PLN
fall since 2014. The rise of the VAT in 2019 from 8% to 10% unpredictable given we don’t have enough information
19 CPI strongly dampened private consumption (-2.9%). about the duration of the outbreak and its impact on
Thu
global growth.
y The decrease of new cases of coronavirus detected in China CZK
24 Flash manufacturing in the second half of the month suggested a turning point y Japan faces a threat of recession in Q1 as the world’s third
Tue PMI and brought some relief to investors. largest economy is vulnerable to weaknesses from its Source: Reuters, 2018
Chinese partner. Investors will focus on the Bank of Japan
30 Summary of opinion of y The Japanese yen registered its largest daily loss for
6 months against the US dollar (-1.4%) and 2.5 years against and its approach to risk. AUD
Mon the BOJ March meeting
the euro (-1.5%). The USD/JPY rate hit a 9-month high (¥112) y With investors focused on coronavirus news, any strong
31 on February 19. evidence of eradication will provide relief and a likely a
Tue
Industrial output
sharp contraction of the Yen. JPY
31 Unemployment rate
Tue
Economic data GBP/JPY (12 months) CNY
150
Base Rate: -0.1%
GDP (annual growth): -0.4%
145
NZD
140
Inflation (annual growth): 0.7%
135
Unemployment: 2.2%
130
SGD
Trade Balance: -¥1313 Bn 125
M A M J J A S O N D J F
MXNCNY
USD
By Steven Dooley, Currency Strategist – Asia Pacific
CAD
March events February review March risk events and key themes GBP
The Chinese yuan continued its 2020 losses in February as the The economic impact of the coronavirus is still unknown with
02 Caixin Manufacturing
economic impact of the contagious coronavirus pressured Chinese economic growth potentially falling from 6.0% last
Mon PMI
the currency. year to between 4.5% and 5.5% in 2020.
EUR
04 Caixin Services PMI The CNY fell from six-month highs versus the US dollar in The Chinese government has taken action to provide support
Wed January and those losses extended in February. to business, providing debt payment relief and lowering the
09 Trade balance
The main focus remains on how long businesses will need to key lending prime rate from 4.15% to 4.05% on 21 February.
CHF
Mon shut down operations. y Chinese data will be closely watched with more up‑to‑date
Some businesses, including key factories, have been able to readings, such as the purchasing manager indexes (PMI),
10 to be used to gauge the impact of the many coronavirus-
Tue
CPI restart at reduced production levels, but many operations,
including small to medium enterprises and consumer-focused inspired shutdowns. PLN
16 Industrial production
business, are still closed. y The markets will also be looking for the Chinese government
Mon y The USDCNY moved back above the key 7.00 level in to extend stimulus. This could provide a short-term boost for
February in another sign of the yuan’s weakness. the CNY. CZK
y The CNY has been stronger versus most other currencies, Source: Reuters, 2018
helped by its close link to the US dollar.
AUD
JPY
Economic data USD/CNY (12 months) CNY
7.20
Base Rate: 4.35%
GDP: 6.0%
7.00
NZD
Inflation: 4.5%
Unemployment: 3.7%
6.80
SGD
Trade Balance: USD47.2 Bn 6.60
M A M J J A S O N D J F
MXNNZD
USD
By Steven Dooley, Currency Strategist – Asia Pacific
CAD
March events February review March risk events and key themes GBP
The NZDUSD neared 11-year lows last month with worries about The Reserve Bank of New Zealand meeting in mid-February
04 Dairy prices a global, coronavirus-inspired slowdown and the rampaging sounded more confident, with the RBNZ indicating it didn’t
Wed
US dollar pressuring the pair. expect to cut rates again in 2020.
EUR
19 GDP A mixed employment report early in the month, with labour The NZD’s gains, however, were short-lived.
Thu growth weaker but the unemployment rate falling, kept The broader sell-off in “risk” assets, especially after poor data
19 Dairy prices
markets on edge. in the US, caused markets to fret that a global slowdown could CHF
Thu A weaker retail sales number, falling from 1.6% in the pressure the NZD.
September quarter to 0.7% in the December quarter, also y The market impact of coronavirus has seen markets turn
25 pointed to a potential slowdown in NZ activity.
Wed
RBNZ decision
y Dairy prices fell sharply, losing almost 8.0% over the month,
more nervous with one full rate cut priced-in over the next
12 months, despite the RBNZ’s confidence.
PLN
26 Business confidence
in line with losses in other major commodities y The RBNZ next meets on 25 March.
Thu y The NZD was weaker across markets, with the NZDAUD
falling from five-year highs and the NZDGBP dropping to CZK
four-year lows.
Source: Reuters, 2018
AUD
JPY
Economic data NZD/USD (12 months) CNY
0.70
Base Rate: 1.0%
GDP: 2.3% 0.68 NZD
Inflation: 1.9% 0.66
Unemployment: 4.0% 0.64 SGD
Trade Balance: -NZD 550 M 0.62
M A M J J A S O N D J F
MXNSGD
USD
By Steven Dooley, Currency Strategist – Asia Pacific
CAD
March events February review March risk events and key themes GBP
The Singapore dollar fell sharply in February as the economic The Singapore dollar might remain pressured and is
04 Manufacturing PMI impact of the deadly coronavirus hits the local currency. particularly vulnerable to negative economic impact.
Wed
The move was the USDSGD’s biggest one-month gain since Singapore’s exposure to trade, tourism, high-tech EUR
12 Employment November 2016. manufacturing and oil refining means the economy is at the
Thu epicentre of the industries impacted by a slowdown in China
The Monetary Authority of Singapore added to the SGD’s
12 Retail sales
weakness by saying “there is sufficient room within the policy and Chinese manufacturing.
CHF
Thu band to accommodate an easing”.* y The MAS’s next move could further pressure the SGD. The
y A massive drop in the Singapore trade surplus, from MAS is due to meet in mid-April.
17
Tue
Exports SGD4.7b in December to SGD1.5b in January, illustrates
the risk for the Singapore economy from global trade
y Any equity market sell-off could see the SGD weaken.
PLN
23 CPI
interruptions.
Mon
CZK
26 Manufacturing
Thu output Source: Reuters, 2018
AUD
* Source: MAS, 3 February 2020 JPY
Economic data USD/SGD (12 months) CNY
1.40
SIBOR: 1.77%
GDP: 1.0%
1.38
NZD
Inflation: 0.7%
Unemployment: 2.2%
1.36
SGD
Trade Balance: SGD 1.5 Bn 1.34
M A M J J A S O N D J F
MXNMXN
USD
By Joe Manimbo, Currency Strategist – North America
CAD
March events February review March risk events and key themes GBP
Emerging markets stumbled as China’s coronavirus sent Global developments and China’s health crisis, in particular,
02 Manufacturing PMI risk-wary investors ducking for cover in the greenback. will help guide the peso and other Latin American currencies
Mon
Consequently, the higher yielding Mexican peso depreciated, over the coming month. Despite the near-term headwinds, the
EUR
05 Consumer confidence
along with rivals from Colombia and Brazil whose currency, longer run outlook appears brighter for emerging markets as
Thu the real, collapsed to all-time lows. China’s economy likely abundant central bank stimulus should help put the global
decelerated further during the first quarter as the country’s economy on a better growth path.
09 CPI viral outbreak kept many people home and shuttered y Mexican central bankers last month acknowledged that
CHF
Mon businesses. China’s troubles boded negatively for many Latin risks facing growth were skewed to the downside, a dovish
American economies that rely on Asian demand for their
13 bias that kept rate cuts on the table.
Fri
Industrial output resource exports.
y Down 3.2% year-to-date, Colombia’s peso has found a PLN
y After it grew by 6.1% last year, the slowest in 29 years, vulnerability in oil market weakness and crude prices hitting
24 Inflation China’s economy likely decelerated further during the 13-month lows below $50.
Tue
January-March quarter.
y Mexico’s peso erased early year gains, pressured by global CZK
25 Retail sales
y Before China’s deadly virus surfaced, Mexico’s economy growth worries and concerns about President Andres
Wed was already in a vulnerable place after it contracted last Manuel Lopez Obrador’s handling of Latin America’s Source: Reuters, 2018
year for the first time in a decade.
26 Bank of Mexico
y The Bank of Mexico in mid-February cut interest rates to
No. 2 economy.
AUD
Thu policy decision
7.0% from 7.25%, its fifth reduction since August 2019.
27
Fri
Trade balance
JPY
Economic data USD/MXN (12 months) CNY
20.5
Base rate: 7.0%
GDP: 0.0% 20.0 NZD
Inflation: 3.73% 19.5
Unemployment: 3.1% 19.0 SGD
Trade Balance: 1.283 Bn 18.5
M A M J J A S O N D J F
MXNDon’t let the currency
market detract from
your bottom line.
©2020 Western Union Holdings Inc. All rights reserved.
Western Union Business Solutions is a business unit of The Western Union Company. Western Union Business Solutions operates in Japan through Western Union Business Solutions Japan KK (“WUBSKK”).
Western Union Business Solutions (Australia) Pty Limited (“WUBSA”) provides foreign exchange and payment services to Rakuten Bank, Ltd (“Rakuten”), with support services offered by WUBSKK. WUBSA &
WUBSKK together are henceforth referred to as “WUBS”.
Rakuten may offer equivalent foreign exchange and payment services to its customers (however any such customers do not become clients of WUBS by utilizing Rakuten’s services). WUBS has granted
Rakuten permission to share this Monthly Currency Outlook with its customers who may have a genuine business need for the information contained herein on the basis that any recipient of this
communication acknowledges and agrees that the Monthly Currency Outlook has been prepared for general informational purposes only and does not in any way create any liabilities or binding
obligations on WUBS. Whilst the information has been prepared with due care, WUBS makes no guarantees as to its accuracy. Rakuten customers should make their own independent enquiries before
acting on any of the information contained herein. The relationship between WUBS and Rakuten is governed by contract. There is no contractual relationship between WUBS and the customers of Rakuten.
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