| The main event for the US dollar in March was the unexpectedly dovish stance of the Federal Reserve. Some analysts think now that the Fed will hike interest rates just once this year, while many do not expect any hikes at all. Yet the currency ended the month relatively strong, supported by fears of a new global economic recession. The European Central Bank was dovish as well, sending the euro crashing down. Bad macroeconomic data hammered the currency further, leading to speculations about a recession in the eurozone, if not in the whole world. As usual lately, the Great Britain pound was moving largely on the news about Brexit, rallying when news was good and falling after bad news. Ultimately, March ended with no clear resolution of the issue. And with just two weeks till the new deadline, it is anybody's guess what will happen next. Such uncertainty makes it unsurprising that the sterling ended the month as the weakest major currency. The Japanese yen ended March as the strongest major currency even as the Bank of Japan continued to signal that it is ready to make its monetary policy even more accommodative if necessary. The currency got boost from the bleak outlook for the world's economy. The Swiss franc was also very strong in March thanks to risk aversion even after the Swiss National Bank left interest rates in the negative territory and signaled that it will continue to intervene in the currency markets to prevent excessive appreciation of the currency. Canadian dollar was soft in March due to the Bank of Canada, which demonstrated dovish stance, the same as other central banks. The rally of prices for crude oil was unable to help the currency, which usually follows moves of the commodity. Surprisingly, other commodity currencies did not perform that bad. While the Reserve Bank of Australia demonstrated neutral stance, which could explain the decent performance of the Australian dollar, the Reserve Bank of New Zealand surprised markets, turning from neutral to outright dovish. Yet that did not prevent the New Zealand dollar from ending March about flat against most rivals. Among fundamentals that were supportive to the kiwi and could explain the currency's decent performance was the accelerating domestic economic growth. Gold did not fare well in March. While the precious metal got support from the dovish stance of the Federal Reserve and recession fears, ultimately gold ended the month with losses. Most likely reason for that was the pressure from the firm US dollar. |
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