USD edges lower as markets await tariff news - Scotiabank

The US Dollar (USD) is slightly softer on the session. The USD benefitted from stronger than expected preliminary March US PMI data yesterday which fended off slowing growth concerns, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

USD slips back as markets await clarity on tariffs

"DXY gains extended through the low/mid 104 area but were tempered by comments from President Trump who indicated that sectoral tariffs (autos, pharma. Lumber, chips) might well be coming soon (after reports indicated that the administration was focused on reciprocal tariffs for the April 2nd announcement). He later conceded that many countries might get tariff concessions, however. The president also said he would like to see the Fed lower interest rates."

"The DXY is tracking a little lower this morning, with the AUD leading gains among the core majors after the government unveiled surprise tax cuts in a pre-election budget. The EUR is a little firmer, while German bunds are underperforming, following comments from ECB hawks suggesting policymakers may pause the easing cycle in April. Speaking on Bloomberg yesterday, Stephen Miran, chair of the White House CEA said the president was focused on using tariffs to rebalance global trade."

"Pressed on whether FX could be used as a lever, Miran said the idea could be entertained down the road. Intraday price action in the DXY looks toppish, with the 6-hour chart reflecting negative price patterns developing around the overnight peak at 104.47. Intraday losses through 104 should see strengthening, bearish pressure on the index develop. Housing data and Consumer Confidence (which may see a fourth consecutive drop) are the main US data releases."