Euro set to fall further

Today's news headlines:

‘Vladimir Putin preparing for “prolonged conflict” in Ukraine, warns US’. Although Russian forces have been pushed back from Ukraine’s capital of Kyiv, many military strategists believe Vladimir Putin is formulating plans to retake the region. The consolidation of conflict in the Donbas region could lead to an escalation in the coming months if there’s a chance that Putin may not achieve his goals, such as the implementation of martial law. A nuclear threat remains low, but with the uncertain path the war has currently followed, it cannot completely be ruled out. (Financial Times)

‘Euro to hit parity against the dollar within six months, Amundi says’. According to European asset manager Amundi, the Euro is set to fall further against the US Dollar and reach parity by year-end, with EUR/USD down around 7.5% year-to-date. Amundi projects that the European Central Bank will continue to protect borrowing costs in a further divergence with the Federal Reserve, which has been much more hawkish and hiked interest rates by 50 basis points just last week. Parity was last reached in 2002 as usage of the common currency climbed internationally, with the pair reaching a high of over $1.60 before the onset of the global financial crisis in 2008. (Financial Times) 


Today

Asian markets were mixed overnight as US stocks reversed an early sell-off on Tuesday, with the S&P 500 gaining 25 basis points. Oil has ticked higher in early trading today, with WTI up over 2.0%, while the US Dollar Index has sold off by 0.3%.

Events

China Consumer Price Index y/y (April): 2.1% (est. 1.8%)
China Producer Price Index y/y (April): 8.0% (est. 7.8%)
European Central Bank President Christine Lagarde speaks: 9:00AM
US CPI and Core CPI m/m (April): 1:30PM
US Crude Oil Inventories: 3:30PM
US Federal Budget Balance: 7:00PM​​​​​​​

Interbank rates:
​​​​​​​

GBP/USD – 1.2328
GBP/EUR – 1.1679
EUR/USD – 1.0555
USD/CAD – 1.3001

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