Global Perspectives: Two Currencies in a Race, Both Coming in Second

Weekly commentary on international finance and economics including global events and how world issues affect our domestic issues.

Two Currencies in a Race, Both Coming in Second Share this story: Markets were expecting a dovish tone from the U.S. Federal Reserve at its March meeting, and Fed Chair Jerome Powell certainly didn't disappoint. The Fed acknowledged slowing economic momentum and soft inflation and downgraded its economic forecast. Additionally, the Fed signaled that it would slow the pace of its balance sheet normalization and end it completely by September. From a global perspective, a pause by the Fed gives us pause when looking at the U.S. dollar and how this changes our thoughts going forward. Those who have been following our forecasts know that we expected some weakness in the U.S. dollar after the first quarter of 2019. That view got a boost Wednesday with the Fed's moves. What interested us was the trading action in the first few hours after the Fed meeting. There was an initial reaction of most currencies to strengthen against the greenback. The one outlier was the British pound, which lost ground as the Fed meeting happened on the same day as news broke about what the EU would accept from the U.K. in terms of a proposed Brexit delay. Essentially, pressure is building for the U.K. to either take Prime Minister Theresa May's negotiated deal, or risk a hard Brexit. WATCH THE VIDEO If we can help you with any Foreign Exchange needs, please email foreignexchange@cnb.com or call (800) 447‑4133. Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos! Follow City National Bank on social media: Non-deposit investment products: • Are not FDIC insured, • Are not deposits or other obligations of City National Bank and are not guaranteed by City National Bank, and • Are subject to investment risks, including possible loss of the principal invested. This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. City National Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting. Unsubscribe from this list  |  Update email preferences This message has been sent to bank@banking.offers.report. Please do not reply to this email. To ensure the delivery of future emails, please add foreignexchange@emails.cnb.com to your email address book or safe sender list. Copyright ©2019 City National Bank – All Rights Reserved. 350 South Grand Avenue, 12th Floor, Los Angeles, CA 90071 City National Bank is a subsidiary of Royal Bank of Canada. TERMS & CONDITIONS  |  PRIVACY STATEMENT NMLSR ID# 536994 | City National Bank Member FDIC