Euro Stumbles on Renewed Ukraine Concerns, Pound Rebound Stifled by UK Cost-of-Living 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 Dented by Ukraine Concerns

The Euro trended broadly lower over the past week, with the currency running afoul of fresh concerns over the crisis in Ukraine amid fading hopes for a negotiated end to the conflict. The latest Eurozone PMI releases offered some fleeting support to the single currency in the latter half of the week, but not enough to reverse the downtrend in any meaningful way.

The Eurozone’s latest consumer price index will be the primary focus for EUR investors next week. Another sharp jump in inflation could boost the Euro, if it is seen as placing more pressure on the European Central Bank (ECB) to raise interest rates this year.

Top EUR data releases:

Mar 30 EUR Economic Sentiment (Mar)

Mar 30 EUR German Inflation Rate (Mar)

Apr 1 EUR Inflation Rate (Mar)

 

USD – US Dollar Flip-Flops in Mixed Trade

Trade in the US Dollar was mixed at the start of this week, in response to fluctuating market sentiment, as the situation in Ukraine continued to stoke uncertainty. Offering support to USD exchange rates in the second half of the week were some hawkish comments from Federal Reserve policymakers, which offset a lacklustre US durable goods orders release.

In the spotlight next week will be the latest US non-farm payroll release. March’s figures are expected to report another robust expansion in payrolls, which could further reinforce Fed rate hike expectations and strengthen the US Dollar.

Top USD data releases:

Mar 30 USD GDP (Q4)

Apr 1 USD Non-Farm Payrolls (Mar)

Apr 1 USD ISM Manufacturing PMI (Mar)

 

GBP – Pound Stumbles as Soaring Inflation Raises Cost-of-Living Concerns

The Pound initially strengthened this week, with the currency appearing to benefit from a technical correction following the previous week’s Bank of England (BoE) driven plunge. Unfortunately for GBP investors Sterling was unable to hold on to these gains for long, with a hotter-than-expected inflation print and disappointing Spring Budget giving rise to fresh concerns over the UK’s cost-of-living crisis.

Turning to next week’s session, the final release of the UK’s fourth quarter GDP figures could buoy Sterling if growth for the last three months of 2021 is revised higher.

Top GBP data releases:

Mar 31 GBP GDP (Q4)

Mar 31 GBP Business Investment (Q4)

Apr 1 Manufacturing PMI (Mar)

 

AUD – Australian Dollar Firms as Commodity Prices Strengthen

The Australian Dollar initially stumbled this week as China’s Covid woes and dovish comments from Reserve Bank of Australia (RBA) Governor Philip Lowe exerted pressure on the currency. However, a strong upswing in commodity prices then allowed AUD exchange rates to rally in the second half of the week, propelling the Australian Dollar to new multi-month highs in the process.

Next week will see the release of Australia’s latest retail sales figures, where another robust expansion of sales growth in February could strengthen the ‘Aussie’.

Top AUD data releases:

Mar 29 AUD Retail Sales (Feb)

Mar 30 AUD Business Confidence (Mar)

 

 

ZAR – Rand Spikes on Hawkish SARB Rate Hike

The South African Rand roared higher this week, with a good portion of the currency’s gains being driven by the South African Reserve Bank (SARB) as it continued to raise interest rates. The announcement itself sparked a sharp spike in the Rand after three members of the bank surprised markets by voting for a larger hike.

In the spotlight for ZAR investors next week will be the South Africa’s latest trade figures. Will a strong rebound in the country’s trade surplus help to bolster the Rand?

Top ZAR data releases:

Mar 31 ZAR PPI (Feb)

Mar 31 ZAR Trade Balance (Feb)

 

CAD – Canadian Dollar Bolstered by Rising Oil Prices

The Canadian Dollar strengthened this week, with appeal of the oil-sensitive ‘Loonie’ being bolstered as Brent crude prices jumped back above $120 a barrel, following the previous week’s slump.

CAD exchange rates are likely to remain sensitive to oil-price dynamics through next week, although Canada’s latest GDP figures could also offer direction, with an expected acceleration of growth in January likely to reflect positively on the Canadian Dollar.

Top CAD data releases:

Mar 31 CAD GDP (Jan)