What’s been happening?

The dollar lost some of its traction yesterday as global trade tensions remained elevated, with U.S. President Donald Trump discussing joining forces with Germany to counter China’s economic practices. The white house confirmed that Trump had discussed trade practices with China in calls on Tuesday with French President Emmanuel Macron and German Chancellor Angela Merkel. The Markets are nervous that this could lead to an escalation of trade tensions, as Germany may side with the US against China

Sterling bounced off its lows yesterday and was on track to post its biggest daily loss in a month yesterday as expectations of selling pressure from a large corporate healthcare deal prompted investors to take profits after a recent rally. The news that GlaxoSmithKline will buy Novartis’s 36.5 percent stake in their consumer healthcare joint venture for $13 billion in cash triggered an unwinding of sterling positions against its rivals, built up after Britain clinched the transition deal last week.

What’s coming up?

GfK Consumer Confidence is due out today from both UK and EU and is the leading index that measures the level of consumer confidence in economic activity. A high level of consumer confidence stimulates economic expansion while a low-level drive to economic downturn. 

Stateside, we have gross domestic product data and personal consumption data coming out today. The Real Personal Consumption Expenditure released by the Bureau of Economic Analysis, Department of Commerce is an average of the amount of money the consumers spend in a month on durable goods, consumer products, and services. It is considered as an important indicator of inflation. Generally speaking, a high reading is bullish for the USD, while a low reading is bearish. The most recent reading stood at 2%. A run up to a market holiday period for the Easter shutdown could also cause some volatility, as traders square off positions in preparation.