CAD hits one-month high as oil prices rise

Key Movers

The USD remains under pressure as the dollar index (DXY) dips below the 102.383 mark. Considering the recent financial instability caused by the collapse of two regional banks earlier this month has prompted investors to reassess their expectations for future monetary tightening by the Federal Reserve. A pause in interest rate hikes in May is now expected by money markets, with rate cuts expected to follow.

The US Bureau of Economic Analysis (BEA) revealed today that the GDP for the fourth quarter came in at 2.6%. This reading comes in shy of the market's expectation of 2.7% and shows a contraction in GDP growth, as the previous result was at 3.2%. Initial jobless claims for the week ending on March 25^th rose by 7,000. Data published today by the US Department of Labor revealed 198,000 claims, this was up from the previous print of 191,000, and reading worse than the predicted 196,000 claims.

The EUR/USD pair soars above 1.09150 as the euro reaches a one-week high against the dollar. German inflation data is coming in higher than anticipated, while revised U.S. fourth-quarter economic growth figures are weaker than initially reported. Inflation in Germany eased to 7.4% in March from 8.7% the month prior, which is lower than the 7.2% that analysts predicted in a Wall Street Journal survey—lending support for further interest-rate increases by the European Central Bank.

Losses experienced by the greenback have allowed the pound to reach a multi-week high of 1.2380 against the dollar. Persistent selling of the US dollar, coupled with the improvement in risk sentiment, has led to positive pressure on the currency pair. Like its European counterpart, the pound is benefiting from central bank divergence as the US Federal Reserve seems to be less certain about its next step.