Euro Skyrockets on Hopes for Ukraine Peace Deal, US Dollar Faces Setback in Upbeat Trade

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 Soars on Ukraine Peace Talk Optimism

The Euro skyrocketed in the first half of this week, as EUR investors were overjoyed by the reports of progress in Ukraine-Russia peace talks, particularly by Moscows promise to scale back ‘military activity’ near Kyiv. However, the Euro then stumbled again in the second half of the week as Vladimir Putin threatened to cut off European gas supplies, leading EUR investors to largely ignore a record jump in Eurozone Inflation.

Centre stage next week will be Germany’s latest industrial data. If factory orders and industrial production continued to rise in February, the Euro may be able to extend its rally, even if Ukraine optimism fades.

Top EUR data releases:

Apr 4 EUR German Trade Balance (Feb)

Apr 6 EUR German Factory Orders (Feb)

Apr 7 EUR German Industrial Production (Feb)

 

USD – US Dollar Undermined by Bullish Trade

The US Dollar came under some notable selling pressure through the first half of this week as risk-on flows sapped demand for the safe-haven currency. The ‘Greenback’ was then able to recoup a good portion of these losses in the latter half of the session as the mood soured again, although this recovery was kept in check by a weaker-than-expected US payroll reading.

In terms of data, the main catalyst of movement in the US Dollar next week will likely be the ISM non-manufacturing PMI, where an expansion in the US service sector may help to shore up support for the ‘Greenback’.

Top USD data releases:

Apr 4 USD Factory Orders (Feb)

Apr 5 USD Non-Manufacturing PMI (Mar)

Apr 7 USD Initial Jobless Claims (2/Apr)

 

GBP – Pound Bolstered by Ukraine Hopes

After initially stumbling as a result of some dovish comments from Bank of England (BoE) Governor Andrew Bailey, the Pound was spurred higher by the hopes for a negotiated end to the war in Ukraine. Reinforcing this upside in Sterling was a stronger-than-expected UK GDP release in the second half of the week.

A lull in high-impact data could leave the Pound to struggle next week, particularly if this leaves the focus to shift back to the UK’s cost-of-living crisis.

Top GBP data releases:

Apr 5 GBP Services PMI (Mar)

 

AUD – Australian Dollar Wobbles on Disappointing Chinese Data

The Australian Dollar initially strengthened this week, with the risk-sensitive being carried higher as an upbeat market mood prevailed. Lacklustre Chinese PMIs then resulted in AUD exchange rates briefly faltering in the second half of the week amidst a sharp rise in commodity prices.

In the spotlight for AUD investors next week will be the publication of the Reserve Bank of Australia’s (RBA) latest Chart Pack. This summary of macroeconomic and financial market trends could buoy the ‘Aussie’ if the outlook for Australia’s economy is largely positive.

Top AUD data releases:

Apr 4 AUD Retail Sales (Feb)

Apr 5 AUD Services PMI (Mar)

Apr 6 AUD RBA Chart Pack

 

 

ZAR – Rand Buoyed by Risk-On Trade

The South African Rand trended broadly higher over the past week, with the emerging market currency being bolstered by a risk-on mood. However these gains were capped somewhat by softening commodity prices as well as a record jump in unemployment in the latest quarter of 2021.

In the absence of any notable ZAR data releases next week, the direction of the Rand is likely to be dictated by market sentiment. Will a prevailing bullish mood help to prop up demand for the Rand?

 

CAD – Canadian Dollar Dented by Weaker Oil Prices

The Canadian Dollar faced an uphill battle this week as the appeal of the commodity-linked currency was compromised by a persistent slump in oil prices. An upbeat GDP print helped to cushion the blow in the latter half of the week however.

The publication of Canada’s latest jobs report will no doubt be the focus for CAD investors next week, with the Canadian Dollar potentially slumping if the jobless rate jumped again in March.

Top CAD data releases:

Apr 5 CAD Balance of Trade (Feb)

Apr 6 CAD Ivey PMI (Mar)

Apr 8 CAD Unemployment Rate (Mar)