Mixed Outlook from the BoE Drives Pound Volatility
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 Undermined by Coronavirus Concerns
The Euro went on the defensive this week as concerns over a coronavirus resurgence in Europe and the sluggish EU vaccine rollout took their toll on the single currency. The publication of the Eurozone’s latest PMI figures offered some respite to the Euro however due to a record expansion of growth in the manufacturing sector this month.
Looking ahead to next week’s session, the focus for EUR investors will likely be on the Eurozone’s latest consumer price index, with the Euro potentially facing some headwinds if inflation slowed again this month.
Top EUR data releases:
Mar 30 EUR German Inflation Rate (Mar)
Mar 31 EUR Inflation Rate (Mar)
Apr 1 EUR German Retail Sales (Feb)
USD – US Dollar Surges in Skittish Trade
The US Dollar made solid gains this week as investors flocked to the safe-haven currency amidst a prevailing risk-off mood. This upswing in the ‘Greenback’ was further supported by rising US Treasury yields as well as speculation President Biden is planning a $3 trillion infrastructure stimulus package.
Turning to next week’s session, the focus for USD investors will no doubt be on the latest US payroll reading, with the US Dollar set to surge if payroll numbers skyrocketed again in March.
Top USD data releases:
Apr 1 USD Initial Jobless Claims (27/Mar)
Apr 1 USD ISM Manufacturing PMI (Mar)
Apr 2 USD Non-Farm Payrolls (Mar)
GBP – Pound Dented by Vaccine Supply Concerns
The Pound faced some setbacks this week as concerns over potential vaccine supply shortages and the threat of Europe’s third wave of coronavirus infections making it to the UK weighed on Sterling sentiment. Elsewhere, some mixed data releases infused volatility into GBP exchange rates. The latest UK inflation figures disappointed, while domestic employment and PMI releases beat expectations.
GBP investors will be keeping a close eye on UK coronavirus developments next week as the impending vaccine shortage and the possibility of infections creeping higher may put pressure on the UK government to alter its reopening plans.
Top GBP data releases:
Mar 31 GBP GDP (Q4)
Apr 1 GBP Manufacturing PMI (Mar)
AUD – Australian Dollar Suffers in Risk-Off Trade
The Australian Dollar spent most of this week on the back foot, with the risk-sensitive currency coming under pressure amid a souring of market sentiment. Particularly damaging for the China-proxy ‘Aussie’ was an escalation of tensions between the West and China following a move by the US, Canada, the UK and EU to impose sanctions on Beijing.
Coming up next week, the publication of Australia’s latest trade figures could offer some support to AUD exchange rates if the nation’s trade surplus continued expanding last month.
Top AUD data releases:
Mar 31 AUD Business Confidence (Mar)
Apr 1 AUD Trade Balance (Feb)
Apr 1 AUD Retail Sales (Feb)
ZAR – Rand Sinks as Investors Shun Emerging-Market Currencies
The South African Rand faced an uphill battle this week, with the emerging-market currency suffering amid the prevailing risk-off mood, as well as getting caught up in a wider emerging market sell-off at the start of the week following the collapse of the Turkish Lira. This downside in the Rand remained in place in spite of the South African Reserve Bank (SARB) raising its growth forecasts following its latest rate decision.
Next week could see the Rand attempt a comeback however, if South Africa’s latest trade and PMI figures print positively.
Top ZAR data releases:
Mar 31 ZAR Trade Balance (Feb)
Apr 1 ZAR Manufacturing PMI (Mar)
CAD – Canadian Dollar Rocked by Oil Price Volatility
The Canadian Dollar traded in a wide range this week as the commodity-linked ‘Loonie’ was rocked by fluctuating oil prices. This volatility came as an initial slump in oil prices was temporarily reversed after a blockage at the Suez Canal stoked concerns about supply disruptions.
In the spotlight for CAD investors next week will be Canada’s latest monthly GDP release. Will another lacklustre growth reading dampen the appeal of the Canadian Dollar?
Top CAD data releases:
Mar 31 CAD GDP (Jan)