US Dollar set to close off week on the back foot after Michigan surprise reading

NEW YORK (March 14) The US Dollar Index (DXY), which tracks the performance of the US Dollar (USD) against six major currencies, dips lower again on Friday after a few headlines on tariffs and the US spending bill. The index, which has been limited below the 104.00 hurdle this week, hasn’t moved that much despite rumors of a possible ceasefire deal by Ukraine, the first steps in the German spending plan voting and retaliations from Canada and Europe on US tariffs.

On the economic data front, the University of Michigan has published its preliminary consumer sentiment reading for March and the 5-year inflation expectation. Clearly sentiment is rotating with a substantial lower reading in consumer sentiment while inflation expectations are tilted to the upside. 

Daily digest market movers: Consumer says NO

• Gold as a safe haven asset has breached the $3,000 mark this Friday in a recession-feared-induced rally where traders are much concerned about economic growth and the tariffs outlook, with reciprocal levies coming into effect in April. 
• A government shutdown looks to be avoided after Senate Minority Leader Chuck Schumer is said to back the House-passed funding measure. 
• The World Trade Organisation (WTO) has been requested by Canada to look into the possibility US President Donald Trump's tariffs are illegal, Bloomberg reports. 
• The University of Michigan has released its preliminary reading for March:
  • The US Consumer Sentiment Index fell to 57.9, a big deviation from the expected 63.1, coming from 64.7 in the final February reading.
  • The US 5-year Consumer Inflation Expectation jumped to 3.9%, surging from 3.5% in the final February reading. 
• Equities are making another attempt to brush off the negative tone for this week. All indices are up over 0.50% across Europe and in the US. 
• The CME Fedwatch Tool projects a 97.0% chance for no interest rate changes in the upcoming Fed meeting on March 19. The chances of a rate cut at the May 7 meeting stand at 32.8% and 78.5% at June’s meeting.
• The US 10-year yield trades around 4.306%, off its near five-month low of 4.10% printed on March 4 and after hitting a five-day high on Thursday. 

FXStreet