Weekly Currency Transfer Roundup – March 18, 2024

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This week, the US dollar embarked on a slight recovery, registering a 0.69% rise against a basket of six major counterparts, reversing a three-week slump of 1.10%. The comeback was capped off on Friday, with the US Dollar Index (DXY) ticking up by 0.08% to close at 103.446.

The economic landscape offered a mixed bag of indicators:

• Core CPI m/m heated up to 0.4%, surpassing expectations.
• Annual CPI met the mark at 3.2%, holding steady.
• Core PPI m/m edged ahead, surprisingly at 0.3%.
• Core Retail Sales m/m, however, lagged behind at 0.3%, shy of the anticipated 0.5%.
• PPI m/m outpaced forecasts at 0.6%, with Unemployment Claims dipping to 209K.
• Retail sales m/m and the Empire State Manufacturing Index underscored lingering economic soft spots.
• Industrial production m/m and Prelim UoM Consumer Sentiment delivered a nuanced view, adding layers to the economic narrative.

Amid fluctuating indicators, the spotlight shifts to the Federal Open Market Committee (FOMC) meeting, with markets on edge over rate adjustments in the fight against inflation. With treasury yields offering a cushion, the dollar ended the week with modest gains, showcasing resilience in a complex economic ballet.

Euro Weakens: Eurozone Economic Fluctuations in Play

The Euro experienced a challenging week, with the USD/EUR exchange rate climbing by +0.42%, despite shedding -0.91% the previous week. Friday witnessed a slight dip of -0.07%, closing at 0.9179.

Economic Highlights:

• German inflation remained stable at 0.4%, but the Wholesale Price Index unexpectedly fell to -0.1%.
• A rise in Italian unemployment to 7.4% and a -3.2% drop in industrial production pressured the Euro.
• The French Consumer Price Index improved to 0.9%, but Italian retail sales disappointed.

Amidst this, ECB council member Olli Rehn hinted at potential easing in monetary policy: “If inflation…sustainably moves towards the target, we can slowly start easing our foot off the brake pedal.”

For Euro holders, this week’s weakening translates into less favorable exchange rates when converting to other currencies. Transferring money abroad could become costlier, necessitating more Euros to maintain the value of sendings, emphasizing the importance of timing in financial transactions.

GBP Update: Weaker Pound’s Impact on Your Wallet

This week, the USD/GBP exchange rate climbed by +0.97%, recovering from last week’s drop of -1.48%. On Friday, it increased further by 0.15%, closing at 0.78520.

Highlights from the UK included:

• Claimant Count Change was better than expected at 16.8K.
• Average Earnings Index slightly below forecasts at 5.6%.
• GDP stayed stable, matching predictions.

This mixed bag of economic data sent signals of a potentially stronger Pound, buoyed by some sectors outperforming expectations. So, If you’re converting GBP to another currency, a weaker pound means you’ll get less of the foreign currency for your pounds. This could make overseas purchases or investments more expensive.

CAD Update: Canadian Loonie Wrestles with Strong USD Despite Oil Gains

The Canadian Dollar (CAD) faced headwinds this week, as the USD/CAD exchange rate nudged upwards by +0.41%, recovering from a -0.47% dip the previous week, to close at 1.35371 on Friday—a slight +0.04% increase.

Economic data showed:

• Manufacturing Sales held steady at 0.2%.
• Housing Starts surged to 253K, overshooting forecasts.
• Positive trends in foreign securities purchases (8.88B) and wholesale sales (0.1%).

Despite a boost from rising West Texas Intermediate (WTI) oil prices, buoyed by lower US inventories and geopolitical tensions—normally a boon for oil-rich Canada—the CAD struggled against a resilient USD. For individuals looking to exchange CAD or send money overseas, the current dynamics suggest getting fewer dollars for your Canadian currency, making international transactions more costly.

AUD Update: Aussie Dollar’s Resilience Amid Economic Tides

This week saw the Australian Dollar (AUD) carving out gains against the US dollar, with a notable 0.99% rise, bouncing back from the previous week’s 1.47% drop. By Friday’s close, the AUD/USD pair was trading higher at 1.5238, marking a 0.36% uplift.

The currency’s journey was swayed by several key developments:

• A slump in China’s real estate sector and dipping iron ore prices cast shadows over the AUD.
• Unsettling data from China’s housing and credit sectors initially dimmed the Aussie’s lustre.
• In contrast, the Reserve Bank of Australia’s (RBA) optimistic rate hike whispers breathed some life into the AUD’s sails.

Reserve Bank Assistant Governor Sarah Hunter observed, “Australian households are ‘clearly struggling’…led by inflation,” pointing to the domestic challenges.

For those eyeing currency exchanges or overseas money transfers, this week’s AUD strength spells more bang for your buck when converting from AUD to various currencies.

Rupee Rides Economic Waves: A Glimpse into USD/INR Dynamics

This week, the USD/INR exchange rate saw a slight increase of +0.18%, contrasting with last week’s -0.13% decrease. By Friday, the rate modestly declined by -0.04%, closing at 82.8630.

Key Points:

• India’s February wholesale inflation dipped to a chilly 0.20%, showing a thaw from January’s 0.27% frost.
• The Rupee, initially stumbling, found its stride mid-week, lifted by the US dollar’s gentle retreat and sunny forecasts for India’s economic horizon.
• The RBI held its ground with a steady monetary grip, subtly steering the INR’s journey.

For those looking to exchange INR or send money abroad, this week’s slight gain in USD/INR suggests that you’ll get fewer rupees for your dollars compared to last week. However, the rate’s minor decrease on Friday hints at a potential advantage for sending money to India or exchanging USD to INR at the week’s close.

Singapore Dollar Climbs: A Surge in Optimism Boosts USD/SGD Exchange

In a week marked by economic optimism, the USD/SGD exchange rate edged up by 0.48%, showcasing resilience after last week’s -0.95% slide. The week concluded with the Singapore dollar gaining +0.12%, positioning at 1.33762, a testament to its burgeoning strength.

Here’s what stirred the financial waters:

• Singapore’s GDP for 2024 is now forecasted at an upbeat 2.4%, a slight but significant nudge from the earlier 2.3% prediction, heralding anticipated robustness in the manufacturing and construction sectors.
• This revised outlook from the Monetary Authority of Singapore (MAS) survey injects a dose of confidence into the market, underlining a positive economic pulse.
• An interesting twist comes from a spike in Malaysian job applications in Singapore, hinting at a booming job market and promising a diverse and innovative workforce landscape.

For those navigating the currency exchange or remittance seas, this uptick in the Singapore dollar means more bang for your SGD buck in foreign lands. However, sending money to the Lion City might require a few extra dollars, given the SGD’s fortified stance against the US counterpart.

Key Events to Watch for from March 18th to 22nd:

Keep these events on your calendar for the upcoming week as they may affect your currency.

Monday, March 18

• China (CNY)
  • Industrial Production y/y: Forecast 5.3%, Previous 6.8%
  • Retail Sales y/y: Forecast 5.6%, Previous 7.4%

Tuesday, March 19

• Japan (JPY)
  • Monetary Policy Statement & BOJ Policy Rate: Expected -0.10% (unchanged)
• Australia (AUD)
  • Cash Rate & RBA Rate Statement: Expected 4.35% (unchanged)

Wednesday, March 20

• China (CNY)
  • 1-y Loan Prime Rate: Expected 3.45% (unchanged)
  • 5-y Loan Prime Rate: Expected 3.95% (unchanged)
• United Kingdom (GBP)
  • CPI y/y: Forecast 3.5%, Previous 4.0%
• United States (USD)
  • Federal Funds Rate: Expected 5.50% (unchanged)
  • FOMC Economic Projections, Statement, and Press Conference

Thursday, March 21

• Australia (AUD)
  • Employment Change & Unemployment Rate: Employment expected at 40.2K, Unemployment at 4.0%
• Eurozone (EUR)
  • French, German, and Eurozone Flash Manufacturing and Services PMI
• Switzerland (CHF)
  • SNB Monetary Policy Assessment & Policy Rate: Rate expected at 1.75%
• United Kingdom (GBP)
  • Flash Manufacturing and Services PMI
• United States (USD)
  • Unemployment Claims: Forecast 214K
  • Philly Fed Manufacturing Index & Flash Manufacturing and Services PMI

Friday, March 22

• United Kingdom (GBP)
  • Retail Sales m/m: Forecast -0.3%
• Eurozone (EUR)
  • German ifo Business Climate
• Canada (CAD)
  • Core and General Retail Sales m/m
• United States (USD)
  • Fed Chair Powell Speaks

Conclusion

This week’s currency landscape showcased a slight uplift for the US dollar, emphasizing the complex interplay of global economic data and monetary policies. Mixed economic indicators from the US contrasted with Eurozone’s struggles and Canada’s resilience against rising oil prices. The Australian Dollar’s performance reflected global uncertainties, while the Indian Rupee and Singapore Dollar reacted to domestic economic signals. These movements underscore the importance of strategic timing for individuals engaged in currency exchange or sending money abroad, highlighting how fluctuations can impact the value of international transfers.

So, stay alert and enjoy the financial dance! Happy transferring!