Market Update – March 24th
Here’s what you need to know today, Tuesday, March 24th.
The markets are treading carefully this morning after the recent fluctuations. On the agenda, we have the preliminary Purchasing Managers’ Index (PMI) figures for March, concerning Manufacturing and Services in Germany, the euro area, the UK, and the US.
USD Price This Week
This week, the US dollar (USD) is showing the weakest performance against the British pound, as seen in the following table:
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.58% | -0.85% | -0.52% | 0.14% | 0.12% | -0.50% | -0.19% | |
| EUR | 0.58% | -0.27% | 0.11% | 0.73% | 0.69% | 0.08% | 0.40% | |
| GBP | 0.85% | 0.27% | 0.32% | 1.00% | 0.99% | 0.35% | 0.60% | |
| JPY | 0.52% | -0.11% | -0.32% | 0.62% | 0.62% | -0.03% | 0.22% | |
| CAD | -0.14% | -0.73% | -1.00% | -0.62% | 0.00% | -0.64% | -0.33% | |
| AUD | -0.12% | -0.69% | -0.99% | -0.62% | -0.00% | -0.63% | -0.38% | |
| NZD | 0.50% | -0.08% | -0.35% | 0.03% | 0.64% | 0.63% | 0.26% | |
| CHF | 0.19% | -0.40% | -0.60% | -0.22% | 0.33% | 0.38% | -0.26% |
The heat map illustrates the percentage change across major currencies. For instance, choosing USD in the left column and moving to Japanese Yen shows the percentage change for USD against JPY.
On Monday, US President Donald Trump announced the postponement of a military strike against Iranian power plants, crediting “useful and productive discussions.” The markets responded as risk sentiment began to shift, leading to a dip in the US dollar and a rise in US stock index futures and oil prices. Later, Iran’s Foreign Ministry stated there was “no dialogue” with the US, while the White House noted that the situation remains “fluid,” advising that any speculation about a meeting shouldn’t be considered final without official confirmation.
This morning in Europe, US stock index futures are in negative territory, with the US dollar index just over 99.00. After dropping over 9% on Monday, West Texas Intermediate (WTI) oil is rebounding, gaining about 1.5% and heading toward $90.
Gold prices fell to a new low around $4,100 early Monday but recovered most losses, closing the day near $4,400. Currently, XAU/USD seems to be stabilizing in the European session, trading in a narrow band slightly above $4,400.
In Australian news, the S&P global composite PMI saw a notable drop from 52.4 in February to 47 in March, signaling a contraction in private sector activity. The Australian dollar is experiencing a bit of bearish pressure, trading just below 0.7000.
The USD/JPY pair remained steady around 158.50 after a loss on Monday. In Japan, Jibun Bank’s manufacturing PMI decreased from 53 to 51.4, while the services PMI slightly fell from 53.8 to 52.8. Additional data indicated the national consumer price index rose at an annual rate of 1.3% in February, following a 1.5% increase in January.
The euro has gained against the dollar, driven by broad weakness in the dollar, reaching a more than 10-day high of 1.1640 before a slight correction happened this morning, holding above 1.1600.
GBP/USD is currently in a consolidation phase, trading above 1.3400 after a significant gain exceeding 0.6% on Monday.
Frequently Asked Questions about Risk Sentiment
“Risk-on” and “risk-off” refer to an investor’s willingness to accept risk during different periods. In “risk-on” scenarios, investors feel optimistic and are more inclined to invest in riskier assets. Conversely, in a “risk-off” climate, fear drives investors to prioritize safer, more stable assets.
Typically, during these “risk-on” phases, stock markets increase alongside most commodities, except gold. Countries that export significant commodities usually see their currencies rise due to increased demand. However, in “risk-off” conditions, safe-haven assets like government bonds and precious metals typically gain traction.
In “risk-on” environments, currencies like the Australian dollar, Canadian dollar, and New Zealand dollar tend to rise. This is largely because their economies heavily rely on commodity exports, which tend to thrive during periods of anticipated growth.
During “risk-off” times, the US dollar, Japanese yen, and Swiss franc usually see gains. The US dollar is perceived as a safe haven because of its status as the reserve currency, making investments in US bonds more appealing during crises. The yen and franc attract attention as well, due to their stability in turbulent times.
