Pound Plunges on Dire Retail Sales Reading, US Dollar Seesaws amid Fluctuating Market Mood
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 spikes on Hawkish ECB comments
The Euro received a shot in the arm this week following comments from European Central Bank (ECB) Vice President Luis de Guindos, in which he suggested an interest rate hike in July is ‘possible’. While these gains quickly faded, stronger-than-expected Eurozone PMI releases still allowed the single currency to close the week broadly higher.
EUR investors are likely to keep a close eye on the Eurozone’s latest inflation figures. Will another surge in April potentially put more pressure on the ECB to consider tightening its monetary policy?
Top EUR data releases:
Apr 25 EUR German IFO Business Climate (Apr)
Apr 29 EUR Inflation Rate (Apr)
Apr 29 EUR GDP (Q1)
USD – US Dollar Fluctuates amid Mixed Market Mood
The US Dollar spent the first half of this week on the backfoot, being undermined by a moderate risk-on mood as well as a pullback in US Treasury yields. However a souring of market sentiment in addition to some hawkish comments by Federal Reserve Chair Jerome Powell helped to reverse this downtrend in the latter half of the session.
In the spotlight for USD investors next week will be the latest US GDP figures. The preliminary reading for the first quarter is expected to report a slowing of US economic growth, could this weaken the appeal of the US Dollar?
Top USD data releases:
Apr 28 USD GDP (Q1)
Apr 29 USD PCE Price Index (Mar)
Apr 29 USD Personal Spending (Mar)
GBP – Pound Tumbles on Abysmal Retail Sales Figures
The Pound wavered through a shortened session this week, with the currency running afoul of some fresh political uncertainty as MPs backed an inquiry into whether Boris Johnson intentional mislead parliament over the ‘partygate’ scandal. The release of the UK’s latest retail sales figures then pushed Sterling to multi-month lows as a sharper-than-expected contraction in sales growth raised concerns over future consumer spending.
The latest figures from the Confederation of British Industry (CBI) could prove a headache for the Pound next week if they show economic activity weakened in April.
Top GBP data releases:
Apr 25 GBP CBI Industrial Trends (Apr)
Apr 27 GBP CBI Distributive Trades (Apr)
AUD – Australian Dollar Finds Fleeting Gains as Shanghai Lockdown Eases
The Australian Dollar initially firmed this week as AUD investors welcomed the news that Chinese authorities would begin easing the lockdown in Shanghai by allowing the reopening of factories. However the ‘Aussie’ was then forced to relinquish these gains in the latter half of the week as market sentiment soured.
The publication of Australia’s consumer price index will no doubt be the focus for AUD investors next week, Will a sharp rise in inflation bolster Reserve Bank of Australia (RBA) rate hike expectations and help push the Australian Dollar higher?
Top AUD data releases:
Apr 27 AUD Inflation Rate (Q1)
ZAR – Rand Punished by Power Cuts
The South African Rand was placed on the defensive this week as state utility Eskom was forced to expand its scheduled power cuts, undermining activity in the emerging economy. Further weighing on ZAR exchange rates were devastating flooding in the country which is thought to have caused billions in damage.
Looking ahead, should South Africa’s power shortages persist, the Rand could face an uphill battle again next week.
Top ZAR data releases:
Apr 28 ZAR PPI (Mar)
CAD – Canadian Dollar Bolstered by Surging Inflation
The Canadian Dollar rallied this week, as a hotter-than-expected domestic inflation reading fuelled speculation the Bank of Canada (BoC) will continue to raise interest rates in the near-term. This upside in the commodity-linked ‘Loonie’ was further reinforced by an uptick in oil prices.
The publication of Canada’s latest GDP figures is likely to drive CAD exchange rates next week, with an acceleration of growth in February potentially extending the upside in the Canadian Dollar.
Top CAD data releases:
Apr 26 CAD BoC Lane Speech
Apr 29 CAD GDP (Feb)