Currency News March 2018
Currency News March 2018
It wasn’t just the Beast from the East creating frosty conditions across the globe this March. Many of the major currencies have been left out in the cold this month, as we’ve seen with the Euro, whose recent strong performance against Sterling came to an end after this week’s latest round of Brexit talks. In the US, President Trump decided to freeze out two key members of his administration, in what will be the 20th and 21st staff member respectively to leave the White House during his presidency.
Let’s look in detail at the latest political and economic events affecting the currency markets this month.
The Spring Statement from UK chancellor Philip Hammond on March 13th outlined the current health of the British economy and the future looks bright. He stated that the UK has “reached a turning point”, almost a decade on from the damage caused by worldwide recession.
Hammond’s glowing report saw GBP start to make gains on its currency peers, with GBP/EUR reaching 1.1284 on March 14th with CurrencyFair. Sterling was then able to extend these positive gains further and reached a one-month high across several of the major currency crosses. This was due to the March 19th Brussels conference that saw chief EU negotiator Michel Barnier meeting with UK Brexit Secretary David Davis. The agreement reached in essence has granted the UK a grace transitional period as a non-voting EU member from the Brexit date in March 2019 until the end of 2020.
With clearer skies ahead for Brexit talks, the GBP/CAD exchange rate heated up by almost 4% from a February 25th low of 1.7586 to being available at 1.8305 on March 19th with CurrencyFair. Sterling also gained ground against the Australian Dollar, surging by over 3.5% from a March 11th rate of 1.759 to 1.821 on March 19th with CurrencyFair.
Despite the "Irish question" still remaining unanswered after this latest round of Brexit talks, GBP/EUR was standing strong at 1.1353 on March 20th, having reached a one-month high of 1.1388 a day prior with CurrencyFair. Combined with Theresa May's expulsion of 23 Russian spies, the agreement reached in relation to Brexit, saw a considerable thaw around Sterling.
Brexit is not the only political event warming up the currency markets. Over in the US, the big news this month has been the acceptance of a highly surprising North Korean olive branch, with President Trump agreeing to meet Kim Jong Un later this year.
Renewed diplomacy between North Korea and the USA resulted in increased public confidence in the US dollar and saw it rally against most of the major currencies. The USD/GBP exchange rate climbed to 0.7226 and USD/EUR rose to 0.8115 on March 9th with CurrencyFair after the meeting was confirmed.
President Trump is famous for the utterance, “You’re fired” from his time on The Apprentice TV show. On March 12th, US Secretary of State Rex Tillerson was on the receiving end of the phrase from Trump in the form of a printed out tweet. This sudden change in the US administration saw the Euro rally against the US Dollar, with the USD/EUR exchange rate change course from 0.8103 March 12th to 0.8072 on March 14th with CurrencyFair.
This week, the new chair of the Federal Reserve, Jerome Powell, had a big task ahead with his inaugural press conference on Wednesday. It set the tone for his plan for US fiscal policies. Many are waiting to see if he followed the path of his predecessor or set his own course in relation to interest rate hikes. He chose the latter, deciding to allow the U.S economy’s performance to guide him rather than economic models.
The release of a disappointing Eurozone’s Consumer Price Index (CPI) on March 16th chilled the Euro’s performance as it showed February inflation has fallen from 1.3% to just 1.1%. In the light of these results, it seems unlikely that the European Central Bank (ECB) will raise interest rates anytime soon. The day of the report saw the Euro lose ground against Sterling. EUR/GBP exchange rate was available at 0.8855 on March 15th the day before the report and was then available at 0.8794 the day after.
While cities across the US were preparing to turn green for St. Patrick’s weekend, President Trump was preparing for a further change in the White House staff with the replacement of national security adviser Herbert ‘H.R.’ McMaster. This proposed new appointment in the revolving door that is the White House administration saw the Euro rally against the US Dollar, with EUR/USD exchange rate available at 1.2241 on March 17th before rising by almost 1% to 1.2335 on March 20th with CurrencyFair.
We will continue to monitor and report on the latest movements of the currency markets next month.
Important Dates for your diary:
Mar 22 - Bank of England Policy decision
Mar 22-23 - EUR EU Leaders Meet in Brussels
Mar 22 - GBP Bank of England Bank Rate
Mar 27 - USD Consumer Confidence Index (MAR)
Mar 29 - EUR German Consumer Price Index
The news and information contained herein is not investment advice. We intend to merely bring together and collate the latest views and news pertaining to the currency markets – subsequent decision making is done so independently of CurrencyFair and this communication. All quoted exchange rates are indicative. We cannot guarantee 100% accuracy owing to the highly volatile and liquid nature of this currency markets and rates are not guaranteed.
AUD News March 2018
Know your limits: Transferring money or property overseasMarch 20, 2023
5 reasons to work, live, and retire in MexicoMarch 14, 2023
6 apps to send money to Mexico from the USMarch 7, 2023
Expat guide: cheapest places to live in the worldMarch 31, 2022
Refer a friend to CurrencyFair for a referral reward each!January 21, 2023
Cultural differences between Australian and Asian businessMarch 30, 2022