Euro Stumbles on Dismal PMI Releases, US Dollar Knocked by Recession Concerns

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 Sheds Gains on Disappointing PMI Figures

The Euro trended broadly higher through the first half of this week, bolstered by some hawkish comments from European Central Bank (ECB) policymakers. But the single currency then faltered in the second half of the week, on the back of some dismal Eurozone PMIs as well as concerns over European energy security.

The spotlight next week will be on the Eurozone’s consumer price index. Will another acceleration of inflation bolster ECB rate hike bets and lift the Euro?

Top EUR data releases:

Jun 29 EUR German Inflation Rate (Jun)

Jun 30 EUR German Retail Sales (May)

Jul 1 EUR Inflation Rate (Jun)

 

USD – US Dollar Undermined by Powell’s Recession Warnings

The US Dollar was undermined by Federal Reserve Chair Jerome Powell’s congressional testimony this week as he warned more aggressive rate hikes from the bank increases the risk of a US recession. Despite this the ‘Greenback’ was able to find modest gains in the latter half of the week thanks to risk-off flows.

Looking ahead, the US Dollar could stumble at the start of next week amidst forecasts durable goods orders will have slumped last month.

Top USD data releases:

Jun 27 USD Durable Goods Orders (May)

Jun 30 USD PCE Price Index (May)

Jul 1 USD ISM Manufacturing PMI (Jun)

 

GBP – Pound Muted amid Softer BoE Rate Hike Expectations

The Pound trended lower through the first half of this week as a modest rise in UK inflation prompted GBP investors to revise their Bank of England (BoE) rate hike bets. Stronger-than-expected UK PMIs then helped Sterling to bounce back, although these gains were capped by slump in domestic retail sales.

Turning to next week, the Pound may remain muted amid ongoing recession fears and continued political uncertainty.

Top GBP data releases:

Jun 30 GBP GDP (Q1)

Jul 1 GBP Manufacturing PMI (Jun)

 

AUD – Australian Dollar Slides in Risk-Off Trade

The Australian Dollar initially held its ground this week, with some dovish comments from Reserve Bank of Australia (RBA) Governor Philip Lowe being offset by a positive risk-tone. However, the subsequent souring of market sentiment in addition to a slump in commodity prices left the ‘Aussie’ to stumble through the latter half of the session.

Australia’s latest retail sales figures will be the primary focus for AUD investors next week. Will a slowing of sales growth apply some pressure to the ‘Aussie’ in the first half of the session?

Top AUD data releases:

Jun 29 AUD Retail Sales (May)

 

ZAR – Rand Rallies on Hotter-than-Expected Inflation

The South African Rand got off to a poor start this week, as ZAR investors were dismayed by Eskom’s announcement it would need to introduce more load shedding measures. However a surprisingly strong domestic inflation release helped to revive the Rand later in the week as it bolstered South African Reserve Bank (SARB) rate hike expectations.

The release of South Africa’s latest consumer confidence index may act as the main catalyst of movement in the Rand next week, where another negative reading could weigh on ZAR exchange rates.

Top ZAR data releases:

Jun 28 ZAR Consumer Confidence (Q2)

Jun 30 ZAR PPI (May)

Jun 30 ZAR Trade Balance (May)

 

CAD – Canadian Dollar Subdued amid Pullback in Oil Prices

The Canadian Dollar traded sideways through most of this week amidst a sharp pullback in oil prices. This offset the release of stronger-than-expected Canadian retail sales and inflation releases.

In focus for CAD investors next week will be Canada’s latest GDP figures. Will the ‘Loonie’ tumble if growth slowed again in May?

Top CAD data releases:

Jun 30 CAD GDP (May)