USD

On any typical day, US Retail Sales data would really matter to markets; however, the latest wave of market nervousness has focussed attention elsewhere during the European morning session and reignited the risks to Bank stocks. This has quickly morphed to impact broader market risk, sending Bond yields lower and moving major equity indexes swiftly southwards. Front and center are Credit Suisse, whose shares have tumbled by a further 25% this morning after fears over the future viability of the Bank have increased substantially since Monday. Their plight has not been helped by the chairman of the Saudi National Bank, who categorically stated during an interview that they would not be prepared to offer any further funding to the Bank, having previously helped the troubled lender during the previous crisis. The latest risk aversion has understandably fed through to a stronger dollar, with the dollar index (DXY) up around 0.75% on the session so far. 

 

EUR

Tomorrow's ECB meeting will be the first major test of the central bank's appetite to hike rates, given the risks accelerating in the post-SVB environment. With future global growth prospects having the potential to do to inflation, what central bank governors have been attempting to achieve for the past year, markets will tell you that the chances of further rate hikes have now rapidly disintegrated. What the ECB will ultimately do tomorrow remains highly uncertain, but in the meantime, EUR/USD is slipping lower this morning, shaving around 1.3% from the open. 

 

GBP

Today’s UK Budget has the potential to boost the broader pound, given that the chancellor has the capacity to offer programs to boost businesses and offer support to UK public sector workers, who had been striking non-stop throughout the winter. Half a million workers are back on the picket lines today. In a little teaser, the government have already announced an extension to the energy support program this morning. However, GBP/USD remains vulnerable to the strengthening dollar and has slipped roughly 0.7% so far this morning. 

 

JPY

Much the same as the Swiss Franc, the Yen will always likely benefit from extended periods of broad market risk aversion, and having recovered somewhat through yesterday, that risk has suddenly accelerated this morning. The resulting move amongst currencies has seen USD/JPY decline by around 0.5%, which re-affirms the Yen’s safe-haven status, considering the accelerating strength of the greenback against other major currencies. 

 

CAD

USD/CAD has climbed by roughly 0.6% this morning as the Loonie succumbs to broader greenback strength. The move in the Loonie has been further underpinned by a sharp decline in the price of oil (and other major commodities), driven by the prospect of weaker demand. With no key Canadian economic data due for release today, expect the Loonie to track broader market moves. 

 

MXN

Having rebounded through yesterday, the Peso has come under intense selling pressures this morning, with USD/MXN rallying by around 1.6%, which is reflective of moves amongst major emerging market currencies. The pressure on the Peso is likely to continue as long as the broader market volatility encourages investors to gravitate towards less-risky assets.

BRL

USD/BRL could well replicate the move in the Peso (weakness), once the market opens this morning.