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 Lacks Direction Following ECB Announcement
The Euro was muted through the first half of this week’s session, with the single currency struggling to attract support in the face of USD strength and some underwhelming EUR data releases. While the Euro attempted to rally in the mid-week, this proved short-lived as the European Central Bank (ECB) announced it is ready to accelerate the pace of its bond-buying programme.
In the spotlight for EUR investors next week will be the latest ZEW surveys from Germany, which may help to boost the Euro if economic sentiment in the Eurozone’s largest economy continued to improve in March.
Top EUR data releases:
Mar 16 EUR German ZEW Economic Sentiment Index (Mar)
Mar 17 EUR Inflation Rate (Feb)
USD – US Dollar Stumbles as Core Inflation Dips
The US Dollar got off to a strong start this week as the ‘Greenback’ continued to rise in step with US Treasury yields. However the US Dollar quickly shed these gains following the publication of the latest US consumer price index, which revealed a surprise drop in underlying inflation last month and prompted a sharp drop in yields.
Turning to next week, the primary focus for USD investors will be the latest rate decision by the Federal Reserve. No policy changes are expected from the Fed this month, but any additional dovish comments by Fed Chair Jerome Powell could weigh on the US Dollar.
Top USD data releases:
Mar 16 USD Retail Sales (Feb)
Mar 17 USD FOMC Rate Decision
Mar 18 USD Initial Jobless Claims (13/Mar)
GBP – Pound Firms on Vaccine Optimism
The Pound trended higher again this week, with the currency continuing to garner support from the UK’s success with its vaccination rollout as over a third of the adult population have now received at least one jab. However, tempering these gains somewhat were warnings from Boris Johnson that his roadmap for easing restrictions could be altered as the reopening of schools risks raising infections.
The Bank of England’s (BoE) latest rate decision will no doubt be the main catalyst of movement for the Pound next week. Will an upbeat outlook from the bank provide a boost for Sterling sentiment?
Top GBP data releases:
Mar 18 GBP BoE Rate Decision
AUD – Australian Dollar Mixed amid Fluctuating Risk Appetite
The Australian Dollar opened this week on the back foot, as the overwhelming strength of the US Dollar weakened market risk appetite and overshadowed some positive AUD data releases. However, the ‘Aussie’ was able to rebound later in the session as USD exchange rates weakened and AUD investors welcomed the government’s AU$1.2bn package to support the domestic tourism industry.
In the spotlight for AUD investors next week will be Australia’s latest jobs report, where another drop in the unemployment rate last month could help propel the Australian Dollar higher.
Top AUD data releases:
Mar 16 AUD RBA Minutes
Mar 18 AUD Unemployment Rate (Feb)
Mar 19 AUD Retail Sales (Feb)
ZAR – Rand Rallies as GDP Beats Expectations
After a poor start, the South African Rand was able to mount a convincing recovery this week, with an initial rally being triggered after South Africa’s GDP figures printed above expectations in the last quarter of 2020. These gains were then accelerated in the latter half of the week as the appeal of the emerging market currency was bolstered by the improved market mood.
Turning to next week’s session, the publication of South Africa’s latest retail sales figures could exert some pressure on the Rand next week if sales growth is shown to have contracted again in January.
Top ZAR data releases:
Mar 16 ZAR Consumer Confidence (Q1)
Mar 17 ZAR Retail Sales (Jan)
CAD – Canadian Dollar Stumbles Following Muted Response to BoC
The Canadian Dollar dipped this week, with a muted response to the Bank of Canada’s (BoC) latest policy meeting as it warned the pandemic remained a risk to Canada’s economic recovery. This dampened demand for the ‘Loonie’ and saw it shed its initial gains, which came courtesy of an uptick in oil prices at the start of the week.
Looking ahead, the focus for CAD investors next week will be on Canada’s latest CPI reading. Will an acceleration of domestic inflation last month help to boost the Canadian Dollar?
Top CAD data releases:
Mar 17 CAD Inflation Rate (Feb)
Mar 19 CAD Retail Sales (Jan)
Posted in Personal Resources on Mar 12 2021