Pound Rocky on BoE Uncertainty, US Dollar Hit by Economic 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 Mixed on Hawkish ECB and Recession Fears
The Euro (EUR) was mixed through the previous week’s trade as concerns about the Eurozone economy offset a more hawkish tone from the European Central Bank (ECB). Despite Eurozone GDP growth exceeding forecasts, recession fears weighed on European markets.
Downbeat German data could hurt the Euro through next week’s session, with business and consumer morale expected to remain low. Russia-Ukraine developments could also inject some volatility.
Top EUR data releases:
May 23 German Ifo Business Climate (May)
May 24 EUR S&P Global Composite PMI Flash (May)
May 25 German GfK Consumer Confidence (Jun)
USD – US Dollar Tumbles to Monthly Lows
The US Dollar (USD) slumped against the majority of its peers earlier this week, as risk-on trading sentiment dampened the safe-haven currency’s appeal. At the end of the week, the US Dollar fell once more, despite a risk-off mood, as poor earnings results from US retail giants rattled USD investors.
Markets will be looking ahead to the US PMI next week, hoping it offers a healthier view of the US economy. Later, the Federal Open Market Committee (FOMC) meeting minutes could support USD with some hawkish rhetoric.
Top USD data releases:
May 24 USD S&P Global Composite PMI Flash (May)
May 25 USD FOMC Minutes
May 27 USD Core PCE Price Index (Apr)
GBP – Pound Wavers Higher as Markets Mull BoE Rate Hikes
The Pound (GBP) fluctuated this week, trending higher overall, as investors remain usure how the Bank of England (BoE) will respond to the UK’s economic uncertainty. While UK jobs data and retail sales exceeded forecasts, inflation surged to 9% and many economists believe a recession may be on the horizon.
The PMIs next week could provide a vital insight into how the UK economy is performing. In addition, Brexit news and headlines surrounding the UK’s cost-of-living crisis could cause movement.
Top GBP data releases:
May 24 GBP S&P Global/CIPS Manufacturing PMI Flash (May)
May 24 GBP S&P Global/CIPS Services PMI Flash (May)
May 24 GBP CBI Distributive Trades (May)
AUD – Australian Dollar Fluctuates ahead of Election
The Australian Dollar (AUD) fluctuated this week as political uncertainty heading into the Federal Election caused some turbulence. Mixed data from China and Australia, as well as shifting risk appetite, added to AUD’s volatility.
The election results could have a big impact on AUD next week, with a hung parliament potentially hurting the ‘Aussie’. AUD investors will also be looking to some high-impact data for fresh trading impetus.
Top AUD data releases:
May 23 AUD Australian Federal Election Results
May 24 AUD S&P Global Services PMI Flash (May)
May 27 AUD Retail Sales Prelim (Apr)
ZAR – Rand Buoyed by Inflation and Interest Rate Hike
The South African Rand (ZAR) rose overall this week, buoyed by a higher-than-expected inflation release midweek and a subsequent 50-bps interest rate hike from the South African Reserve Bank (SARB).
With no notable data due out next week, risk sentiment could exert the most influence over the Rand.
CAD – Canadian Dollar Wobbles amid Choppy Trade in Oil
The Canadian Dollar (CAD) wavered lower over the past week as oil volatility and a jittery market mood caused headwinds for CAD. Even a hotter-than-expected Canadian CPI failed to boost the ‘Loonie’, with the Canadian currency heading lower against most of its rivals by week’s end.
Economists expect Canada’s latest retail sales report to show strong growth in March, which could bolster the ‘Loonie’.
Top CAD data releases:
May 26 CAD Retail Sales (Mar)