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Euro Weakened by Ukraine Peace Talk Doubts, US Dollar Side lined by Recession Warnings

Euro Weakened by Ukraine Peace Talk Doubts, US Dollar Side lined by Recession Warnings

Find out how the major currencies have been performing and what movement we could see in the days ahead with our weekly exchange rate update.

EUR – Euro Dented by Renewed Ukraine Concerns

The Euro stumbled out of the gate this week as evidence emerged of atrocities committed by Russian troops in Ukraine, which cast fresh doubts over the peace process. The minutes from the European Central Bank’s (ECB) March policy meeting then provided a leg up for the single currency later in the week after they revealed a large number of policymakers believe the bank should expedite its monetary tightening in light of surging inflation.

With this in mind EUR investors will be eager to hear the ECB’s latest forward guidance when it concludes its April policy meeting later this week. Will a more hawkish outlook from the bank help to bolster the Euro?

Top EUR data releases:

Apr 12 EUR German Inflation Rate (Mar)

Apr 12 EUR German ZEW Economic Sentiment (Apr)

Apr 14 EUR ECB Interest Rate Decision

 

USD – US Dollar Firms on Hawkish Fed Hike Speculation

The US Dollar got off to a wobbly start this week, with the currency being pressured the inversion of the US yield curve and fears this may be a signal the US will slip into a recession in the next couple of years. However the ‘Greenback’ was later able to bounce back as the latest FOMC minutes and hawkish comments from Federal Reserve policymakers reinforced expectations the Fed will deliver a half-percent interest rate hike next month.

Centre stage next week will be the US consumer price index. Will another surge in domestic inflation push the US Dollar higher?

Top USD data releases:

Apr 12 USD Inflation Rate (Mar)

Apr 14 USD Retail Sales (Mar)

Apr 14 USD Consumer Sentiment (Apr)

 

GBP – Pound See-Saws as Cost of Living Concerns Mount

Trade in the Pound was mixed this week, with renewed concerns over the situation in Ukraine as well as fresh fears over the impact of the UK’s rising cost of living taking their toll on the currency. On the other hand, an upwardly revised services PMI and a technical correction were able to lend some support to Sterling.

The UK’s latest jobs report and consumer price index will be closely watched by GBP investors next week. Any signs that household budgets could be squeezed further are likely to weigh on the Pound.

Top GBP data releases:

Apr 12 GBP Unemployment Rate (Feb)

Apr 12 GBP Wage Growth (Feb)

Apr 13 GBP Inflation Rate (Mar)

 

AUD – Australian Dollar Soars on Hawkish RBA Forward Guidance

The Australian Dollar stormed higher at the start of this week, with AUD exchange rates hitting new multi-month highs as the Reserve Bank of Australia’s (RBA) latest policy statement proved to be a lot more hawkish than expected. However the ‘Aussie’ was then forced to relinquish most of these gains later in the week amidst fresh concerns over China’s Covid resurgence.

The publication of Australia’s latest jobs report will no doubt be the focus for AUD investors next week, Will another drop in unemployment help to propel the Australian Dollar even higher?

Top AUD data releases:

Apr 12 AUD Business Confidence (Mar)

Apr 13 AUD Consumer Confidence (Apr)

Apr 14 AUD Unemployment Rate (Mar)

 

 

ZAR – Rand Wavers amid Mixed Risk Sentiment

Trade in the South African Rand was mixed this week as the situation in Ukraine unsettled markets and dampened demand for the emerging market currency. The Rand then faced additional pressure at the end of the week as state utility Eskom was forced to implement new load shedding measures.

Turning to next week, will a contraction in February’s retail sales print push the Rand lower?

Top ZAR data releases:

Apr 13 ZAR Retail Sales (Feb)

Apr 14 ZAR Mining Production (Feb)

 

CAD – Canadian Dollar Rocked by Fluctuating Oil Prices

The Canadian Dollar traded erratically over the past week, with the commodity-linked currency see-sawing in tandem with fluctuating oil prices. The ‘Loonie’ then closed the week on a high following an upbeat employment report.

The Bank of Canada (BoC) will deliver its latest interest rate decision next week, in which it is widely expected to hike rates by 50bps points. Could this trigger a sharp appreciation in the Canadian Dollar?

Top CAD data releases:

Apr 13 CAD BoC Interest Rate Decision

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