Euro Firms on ECB’s Optimism, Positive Data Fails to Sustain Pound Gains
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 Bolstered by Relatively Positive Outlook from ECB
The Euro trended higher this week, bolstered by both a sharp drop in the US Dollar at the start of the week and a cautiously optimistic European Central Bank (ECB). Following the bank’s latest policy meeting, ECB President Christine Lagarde predicted an uptick in growth and inflation in the coming months but that downside risks remain.
In the spotlight next week will be the Eurozone’s preliminary GDP figures from the first quarter. This could put significant pressure on the Euro as these look set to confirm that the bloc suffered a double-dip recession over the winter.
Top EUR data releases:
Apr 26 EUR German Business Climate (Apr)
Apr 30 EUR German GDP (Q1)
Apr 30 EUR GDP (Q1)
USD – US Dollar Stumbles on Initial Jump in Risk Appetite
The US Dollar fell sharply at the start of this week’s session, with investors shunning the safe-haven currency amidst an upbeat market mood and fall in US Treasury yields.
However the ‘Greenback’ subsequently clawed back some of these losses later in the week as market risk appetite faltered.
Looking ahead, the US Dollar may receive a major boost next week as the latest US GDP figures are expected to report another healthy expansion of growth in the first quarter.
Top USD data releases:
Apr 26 USD Durable Goods Orders (Mar)
Apr 28 USD Fed Rate Decision
Apr 29 USD GDP (Q1)
GBP – Pound Falters in Spite of Upbeat Data
The Pound started strongly this week, soaring against its peers amidst an upbeat market mood and optimism over the UK’s vaccine rollout.
However, Sterling steadily retreated from its best levels as the week went on, with some upbeat UK data releases undermined by fears the UK could face a ‘summer surge’ in coronavirus cases.
Turning to next week, the Pound will lack any significant economic data releases to drive movement, instead the UK’s vaccination rollout could provide support, with nearly 50% of the population receiving a jab and infections continuing to decline.
Top GBP data releases:
Apr 27 GBP CBI Distributive Trades (Apr)
AUD – Australian Dollar Fluctuates amidst Mixed Market Sentiment
The Australian Dollar traded in a wide range over the past week, with the currency initially riding higher amidst improving market sentiment, before quickly coming under pressure as the mood soured again.
Helping to limit the ‘Aussie’s losses, however, were Australia’s latest retail sales figures, which revealed a sharper-than-expected 1.4% acceleration of sales growth in March.
In focus next week will be Australia’s latest consumer price index, which could bolster the ‘Aussie’ if domestic inflation accelerated as expected in the first quarter of 2021.
Top AUD data releases:
Apr 28 AUD Inflation Rate (Q1)
ZAR – Rand Rocked amidst Fluctuating Market Sentiment
The South African Rand experienced volatility this week, as the emerging market currency struggled to find a baseline amidst mixed market sentiment.
Providing support for the Rand, however, was South Africa’s latest CPI release, which reported that domestic inflation rebounded to 3.2% in March.
Turning to next week’s session, the Rand may continue to face pressure should market risk appetite continue to be clouded by a rise of global coronavirus cases.
Top ZAR data releases:
Apr 30 ZAR Trade Balance (Mar)
CAD – Canadian Dollar Soars in Response to Hawkish BoC
The Canadian Dollar shot higher this week in the wake of the Bank of Canada’s (BoC) latest policy meeting. The bank struck a more hawkish tone than expected by revising its growth forecasts higher, trimming its weekly bond purchases, and hinting that rate hikes could start to take place earlier than previously expected.
Coming up next week, the publication of Canada’s latest retail sales figures could offer a leg up to the ‘Loonie’ assuming sales growth rebounded as forecast in February.
Top CAD data releases:
Apr 28 CAD Retail Sales (Feb)
Apr 30 CAD GDP (Feb)