Markets on Monday: US Jobs and Tariffs the Key to the USD this Week
Rowan Crosby • 1 min read
While March marks the unofficial month for the US Federal Reserve to look to raise rates, markets have had a shaky start.
Proposed tariffs on steel and aluminium, suggested by US President Trump have thrown a spanner in the works. Overall, it was a tough month for investors after the biggest market correction we’ve seen in some time. Certainly, that was the case for US equity markets.
The proposed tariffs, did their best to derail the USD, which had been looking stronger for a few sessions. Markets didn’t like the idea of a trade a war and it can only hurt the dollar.
On Friday we have the monthly jobs number out of the US. While it appears a rate hike in the US is all but a certainty, the Fed will still be looking for a strong number. Anything positive might just be the icing on the cake for Powell as all eyes will be on the next FOMC in the coming weeks.
The USD Not Liking Tariffs
Resistance at 90.50 and 91.00 had been firmly in the dollar’s sights, prior to the saga on tariffs. I was hopeful that we had some more upside ahead. Things are now a little more uncertain.
Any form of controls are not going to be a positive for the greenback. There’s now certainly a chance of some downside this week, as this is a fundamental that will impact markets and the economy.
While I was bullish and still am on the US economy. This does seem a strange move from the US President and not one I would have expected from a Republican. I wouldn’t be surprised if we get a push towards 89.50 on Monday.
US Dollar Index (DXY)- 240 min Chart.