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USD on the back foot

USD on the back foot

Economic Calendar

  • 30/05/2022: Memorial Day Holiday in US
  • 30/05/2022: EU Leaders Summit
  • 30/05/2022: German HICP
  • 31/05/2022: German Unemployment Change
  • 31/05/2022: EUR CPI
  • 31/05/2022: US Consumer Confidence
  • 01/06/2022: German Manufacturing PMI
  • 01/06/2022: ECB President Lagarde Speech
  • 01/06/2022: UK Manufacturing PMI
  • 01/06/2022: 2 FOMC Member speak
  • 02/06/2022: UK Holiday – Queen’s Jubilee
  • 03/06/2002: UK Holiday – Queen’s Jubilee
  • 03/06/2022: US Non Farm Payroll

USD remains on the back foot, as risk on market mood remains. This was largely due to easing hopes for aggressive Fed tightening later this year. The EUR continued to gain ground on the dollar for a second week in a row. This was after hitting multi-year lows of 1.0348 in mid-May -It is now above 1.07. 

Cable (GBP/USD) has now settled above 1.26, although down from the close to 1.27 highs we saw last week. GBP pared back gains despite the risk-on market mood. 

Investors were cautious, as macroeconomic data pointed to slowing economic growth 

In other news – The rising inflation, and slow economic growth has created a cost of living crisis. # British Finance Minister Rishi Sunak was forced to intervene, and as such we have seen a U Turn on the windfall tax. It is hoped this will create an additional £5 billion in revenue for the government, which will be  used to help lower income families through energy grants and one-off payments of £650 to lowest-income households. Although well received, Sunak has since admitted that it likely will do little to curb inflation, and as such, the news was largely ignored in the market.

Looking forward to this week, we have a packed economic calendar – Particularly in the UK, where we are all able to enjoy a 3 day week.

Main areas of focus would be speeches from ECB President Lagarde, and FOMC members on Wednesday. The market will be looking for any further indication of upcoming monetary policy, regarding curbing inflation through interest rates. We also have US employment data in the form of Non Farm Payrolls on Friday.

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