• US President Donald Trump is reportedly ready to fire his national security adviser before meetings with North Korea in May
  • JPY is set to end this week as the second best currency in the G10 basket, giving way just to the SEK
  • NZ dollar loses steam as manufacturing PMI comes in below forecasts in February

The political reshuffle in the White House does not seem to be coming to an end any time soon. After firing Gary Cohn and Rex Tillerson US President Donald Trump is purportedly set to fire his national security adviser McMaster before meetings with North Korea due in May, according to multiple source which reported to CNN. The timing of an announcement is unclear, whereas White House press secretary Sarah Sanders dodged discussing the issue tweeting “Just spoke to Trump and McMaster – contrary to reports they have a good working relationship and there are no changes at the National Security Council”. This story seems to be in line with latest Trump’s remarks that he is prepared to dismiss aides with whom he has clashed seeking collaboration with advisers being more aligned with his populist agenda. Financial markets have barely reacted to those revelations (except for another decline in the USDJPY), however, it underlines that we could be still a long way off from the end of the political reshuffle in the US therefore there is the likelihood that political threads will prevail those concerning macroeconomic ones.

link do file download linkTechnically the USDJPY could be already poised to resume its downtrend as the pair failed to break above a key resistance at 106.4. Source: xStation5

Looking at the G10 currencies one may notice that the Japanese yen has been the second best performer so far this week, and it’s the strongest one in early trading on Friday. In turn, the best currency among major peers has been the Swedish krona, while the NOK – which benefited from hawkish remarks delivered by the Norges Bank yesterday – has placed at the third position.

link do file download linkNew Zealand manufacturing PMI disappointed last month. Source: Macrobond, XTB Research

The weakest currency in the morning is the NZ dollar remaining under selling pressure following a weakish manufacturing PMI release. It came in at 53.4 against the prior reading at 54.4 (revised down from 55.6), and even as it appears to be fairly far away from a barrier suggesting economic contraction, the index has been hovering close to its lows seen over the course of the recent months therefore caution seems to be warranted.

link do file download linkA weekly time frame that this week is not going to be a breakthrough as the pair remains trapped within range trading. Once one of this levels is breached it could pave the way for a livelier swing. Source: xStation5