David McNamara: Signs the US economy is losing momentum

Fed chair Jerome Powell will have to reveal its strategy when it publishes its latest “dot-plot” after the next Federal Open Market Committee meeting on March 19th. (Picture: AP Photo/Jose Luis Magana)

In what was another week of volatility on currency markets, driven once again by US president Donald Trump’s comments, there now appears to be an underlying weakening trend in US data, which has weighed on equites and underpinned a recovery in bonds.

While further promises of tariffs on the EU has negatively impacted the euro in recent days, the currency had recovered some ground against the dollar of late, rising from $1.02 at the beginning of February to a peak of above $1.05, before retrenching back to $1.04, as tariff concerns took hold once more. Eurozone data has been trending slightly stronger, but dollar weakness had been the key driver of the euro rally, as investors digested a series of weak US data points on the economy.