Almost a month since the start of the Ukraine war, the USD is stuck in a limbo of sorts. The currency has clearly outperformed the low-yielding currencies of energy importers like the JPY and EUR but also underperformed the high-yielding currencies of energy exporters - the AUD and CAD. It seems that the traditional model where the USD outperforms when the Fed is leading the global tightening cycle or when risk aversion drives investors has been replaced by a new market paradigm which centres on the relative commodity terms-of-trade of the G10. On the day, focus will be on the speeches by Fed’s John Williams, Mary Daly and Loretta Mester as well as the war in Ukraine. Today’s FOMC speeches will drive direction.
CAD - Canadian Dollar
The CAD has broken well below 1.26 to start the day. High oil prices are providing some support for the CAD but the broader relaxation in market volatility is helpful in underpinning the CAD near recent range lows. There is little new news to focus on for the CAD on the domestic front today which leaves the loonie at the mercy of the external environment and the USD in the short run. Strong domestic growth trends (strong Retail Sales data keeps Q1 GDP tracking well above 5%), rising interest rates, and firm commodity prices point towards the CAD remaining firm—and strengthening a bit more. Observe the foreign exchange rates.
EUR - Euro
EUR/USD has dipped sub 1.10 could fall further. For today, we have six European Central Bank speakers and the January eurozone current account data. Eurozone January trade data was terrible for the eurozone and is also on the wrong side of the fossil fuel surge. The flexibility of the euro now means that the eurozone is paying even more for its imported energy - a development the ECB is starting to brief against. In reality, tighter monetary policy (not FX intervention) is the only credible tool available to the ECB to fight euro weakness. Let's see if they are prepared to use it. Given the momentum behind the move in US interest rates, we could easily see EUR/USD pressing the recent 1.0800 low over coming sessions.
GBP - British Pound
GBP has been outperforming in Europe. Its strength, despite last week's dovish hike by the BoE, is a reminder that continental Europe faces the same, if not worse pressure from the current energy shock. In focus over coming sessions is the UK Chancellor's spring statement (tomorrow). There is much press speculation over support measures such as a cut in fuel duties, increases in national insurance thresholds, and more generous corporate tax breaks to encourage investment. That the UK's fiscal position has some room to support the economy may provide a little more room for the Bank of England to hike. Money markets have re-priced the BoE's Bank rate back to 2.20% for the year. For now look for the GBP to remain better supported than the euro.
Get access to our market experts and sign up to receive the latest updates on any currency with our real-time exchange rate reports.
Sign up to receive the latest market news from our experts.
Who can use the MTFX payment service?
Individuals and businesses who need to send money in foreign currency internationally can use MTFX’s services. The beneficiary of the transfer must have a bank account for the funds to be paid into.
Personal clients usually use our services to transfer money between their own accounts in two different countries.
Business clients usually use our services to transfer funds to suppliers, fund international operations, or repatriate overseas earnings.
Why should I use MTFX and not my own bank?
MTFX offers currency exchange rates that are 2-5% better than those offered by the banks. Personal clients usually save hundreds of dollars per transfer and for larger transfers, the savings can run into the thousands.
We also offer excellent customer service, dedicated currency specialists, and a 24/7 online platform with best-in-class technology that allows you to complete transfers from any device virtually anywhere in the world.
Business customers save with better currency exchange rates and proven solutions geared towards managing and mitigating foreign exchange risk. Our solutions include forward contracts, market orders, rate alert services, and much more - all backed by great technology and great people.
How do customers send funds to MTFX?
Funds can be transferred via wire transfer, Electronic Funds Transfer (EFT), or ACH payment services. MTFX maintains bank accounts in all major currencies with highly-rated banks. Our banking infrastructure ensures that you can transfer funds to us quickly and securely.
How long does it take MTFX to transfer funds?
Our global network of banking partners allows us to get funds to virtually anywhere in the world quickly and efficiently. Most wire transfers from MTFX will be received by your beneficiary within 24-48 hours. MTFX also offers same-day transfers that are almost instantaneous, as well as low-cost in-country payment services for your less urgent transfers. For further information please speak to one of our currency specialists.