Pound Soars on Reopening Optimism, US Dollar Undermined by Dovish Powell Comments

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 Rallies amid USD Weakness

The Euro’s negative correlation with the US Dollar helped the single currency to advance this week, with EUR exchange rates enjoying a particularly strong bump in the latter half of the session. However, it wasn’t all plain sailing for the Euro as it faced some difficulty in the first half of the week amidst ongoing concerns over the EU’s vaccine rollout.

In the spotlight next week will be the release of the Eurozone’s consumer price index, where another healthy inflation reading could provide some support for the Euro.

Top EUR data releases:

Mar 01 EUR German Inflation Rate (Feb)

Mar 02 EUR Inflation Rate (Feb)

Mar 04 EUR Retail Sales (Jan)

 

USD – US Dollar Dented by Dovish Powell

The US Dollar fell back this week in response to some dovish comments from Federal Reserve Chair Jerome Powell, in which he suggested that the US economy remains a long way from achieving its inflation and employment goals. Adding to the pressure on the US Dollar was also the prevailing risk-on mood, which sapped demand for the safe-haven currency.

Turning to next week, the focus for USD investors will be on the latest non-farm payroll figures. Will another lacklustre expansion of the US jobs market put more pressure on the US dollar?

Top USD data releases:

Mar 01 USD ISM Manufacturing PMI (Feb)

Mar 03 USD ISM Non-Manufacturing PMI (Feb)

Mar 05 USD Non-Farm Payrolls (Feb)

 

GBP – Pound Soars on Reopening Hopes

The Pound extended its bullish run again this week, climbing to new multi-month highs as GBP investors’ reopening hopes were bolstered by Boris Johnson’s unveiling of his roadmap out of lockdown. However, Sterling proved to be a victim of its own success, dipping from its best levels towards the end of the week as it fell afoul of some profit taking.

In the spotlight next week, we have the publication of Chancellor Rishi Sunak’s 2021 Budget, which is expected to reinforce the Pound’s positive trajectory if the Chancellor extends the government’s fiscal stimulus as forecast.

Top GBP data releases:

Mar 01 GBP Manufacturing PMI (Feb)

Mar 03 GBP Services PMI (Feb)

Mar 03 GBP 2021 Budget

 

AUD – Australian Dollar Bolstered by Upbeat Trade

The Australian Dollar broadly strengthened this week as the risk-sensitive currency was carried higher by a prevailing risk-on mood. Aiding the ‘Aussie’s advance was a stronger-than-expected rise in Australia’s Wage Price Index in the last quarter of 2020.

It’s set to be a busy session for AUD investors next week, with both the Reserve Bank of Australia’s latest rate decision and the latest domestic GDP figures to contend with.

Top AUD data releases:

Mar 02 AUD RBA Rate Decision

Mar 03 AUD GDP (Q4)

Mar 04 AUD Trade Balance (Jan)

 

ZAR – Rand Fluctuates on Budget Announcement

The South African Rand traded in a wide range over the past week as Finance Minister Tito Mboweni unveiled his 2021 budget, which treads a pragmatic path between supporting South Africa’s economic recovery and curbing its debt pile.

Looking ahead to next week, should the market mood remain broadly upbeat and South Africa’s latest manufacturing PMI prints positively, we could see the Rand get off to a solid start in March.

Top ZAR data releases:

Mar 02 ZAR Manufacturing PMI (Feb)

 

CAD – Canadian Dollar Firms amid Surging Oil Prices

The Canadian Dollar trended higher again this week, as the appeal of the commodity-linked ‘Loonie’ was strengthened after WTI oil prices surged to a 13-month high on hopes demand will rebound sharply in 2021.

Turning to next week, CAD investors will be focused on the publication of Canada’s latest GDP figures. Will the continued expansion of growth in the last quarter of 2020 help to buoy the Canadian Dollar?

Top CAD data releases:

Mar 02 CAD GDP (Q4)

Mar 05 CAD Ivey PMI (Feb)