The US dollar is exhibiting a generally stronger performance, albeit subtly, as we approach a potentially volatile North American trading session. The focus extends beyond US data, which is abundant—featuring the PCE deflator, an initial glimpse at Q4 GDP, the preliminary February PMI, and the final February reading on consumer confidence from the University of Michigan. The Supreme Court is set to deliver several rulings today, potentially addressing the president’s authority to utilize emergency powers for the implementation of extensive tariffs. The event markets indicate that a significant majority anticipates the high court will rule against the majority of tariffs justified by the International Economic Emergency Powers Act. Tensions between the US and Iran continue to be high, yet the likelihood of an immediate strike has eased somewhat, leading to a slight decline in oil prices as the weekend approaches.

This week, the dollar has appreciated in value relative to the G10 currencies. The yen has exhibited significant weakness, declining nearly 1.65%. The Australian dollar has demonstrated strong performance, currently down approximately 0.3% for the week. This week saw a decline in most emerging market currencies. The Argentine peso has shown a performance of approximately 0.6%, followed by the Russian ruble at around 0.2%, and the Brazilian real at 0.15%, marking them as the top performers in the recent analysis. The euro experienced a decline, trading at nearly $1.1740 in North America yesterday, marking a four-week low. It has remained just above that level today. Following the recorded low, the euro has struggled to rise above $1.1780, which aligns with Wednesday’s low, and this level remains intact. Options for one billion euros at $1.1775 are set to expire today. The subsequent zone of chart support is located within the $1.1670-$1.1700 range. The euro concluded the previous week just under $1.1870.

The dollar achieved a seven-session peak against the Japanese yen today, approaching JPY155.65 during late Asia and early European trading. The value has adjusted to approximately JPY155.15 during the European morning session. The session low approached JPY154.90. Nonetheless, the dollar’s technical outlook remains positive, and surpassing the JPY155.65-80 range could aim for the JPY156.50-65 zone next. Sterling experienced a decline, reaching a four-week low yesterday at approximately $1.3435. As it approached the 200-day moving average (~$1.3445), sterling encountered the (50%) retracement of its 8.5-cent rally from the low of early last November (~$1.3010) to the high of late January (~$1.3865). In light of the robust retail sales and solid PMI, the impact has been minimal. Cable has remained under $1.3485. It needs to rise above $1.3510 to enhance the technical outlook. The subsequent support level is identified near $1.3400, followed by $1.3340-50. Sterling’s approximate 1.3% decline this week, if maintained today, would mark the most significant drop since January 2025. The US dollar reached its highest point against the Canadian dollar in almost two weeks, following Canada’s announcement of a smaller than anticipated merchandise trade deficit for December, while the US revealed a somewhat larger deficit.

Excluding the pandemic distortion, Canada’s trade shortfall reached a record level of approximately C$313 billion. Overall exports experienced a decline of 0.2%, primarily driven by a significant 5.8% decrease in exports to the US. The greenback achieved a level of CAD1.3715 and sustained its position above approximately CAD1.3680 for the rest of the session. The current range appears to be maintaining stability today; however, the Canadian dollar continues to exhibit signs of vulnerability. The Australian dollar managed to limit its losses against the stronger US dollar, supported by a central bank with a hawkish stance and positive labor market data. This week, it experienced a decline of approximately 0.35%, making it the top performer among G10 currencies relative to the dollar. It touched the 20-day moving average ($0.7025) yesterday for the first time in a month. The losses extended to $0.7015 today before a recovery brought it back to slightly above $0.7065. The momentum indicators are trending downward, signaling a potential for ongoing near-term consolidation. A breach of the $0.6990-$0.7000 range would indicate that a significant correction is imminent.