ECB representative suggests hard Brexit not priced into Pound

Pound - GBP 

Pound recovering, despite the uncertainty 

On Friday, the Pound hit three-week lows against the US Dollar on Brexit uncertainty. However, early in Monday’s session, Sterling has been regaining ground, trading above the 1.30 interbank level. The Pound may remain volatile in coming sessions as both Theresa May and Britain’s future comes into question. Today, economic data has shown a surge in Britain’s manufacturing sector in March, as businesses step-up activity in case of Brexit disruption. Construction and service sector data will also be out this week, which could provide some moderate influence for the Pound. However, Brexit is expected to be the main driver for the British currency, and a representative from the European Central Bank (ECB) has suggested that a hard Brexit hasn’t been priced into the Pound’s value.

Euro - EUR

Eurozone slowdown continues

Conversely, Eurozone manufacturing activity is continuing to slow down, according to data released today. What’s more, inflation in the currency bloc is also easing, falling from 1.50% to 1.40% on the year in March. Eurozone Retail Sales data will be out later this week, as well as the European Central Bank’s latest meeting minutes which may have some influence over the Euro, especially if the future of monetary policy is mentioned. 

US Dollar - USD

US Dollar gains in popularity

The US Dollar has been gaining favour in recent weeks as it’s often seen as a safe-haven asset. With fears of a global economic slowdown and geopolitical uncertainty, the Dollar has had reason to climb. There are a few high-tier pieces of economic data out this week which may create USD exchange rate movement. Friday will be a day of particular influence when the highly influential US Change in Non-Farm Payrolls and Unemployment Rate numbers are revealed. Average Hourly Earnings stats will also be under scrutiny. 

Australian Dollar - AUD

RBA monetary policy announcement ahead

As the Australian and New Zealand economies are closely linked and share many of the same trading partners, negative news in one can often influence the other. Last week, the Aussie Dollar weakened when negative comments from New Zealand’s central bank emerged but managed to climb by around a cent against its Kiwi counterpart. Data overnight has shown a fall in Australian manufacturing activity in March, attributed to a downturn in the housing market, political uncertainty ahead of the Federal election, and the effect of droughts in eastern states. The Reserve Bank of Australia (RBA) will make its April interest rate decision this week, and investors will be watching closely for any new comments. 

New Zealand Dollar - NZD 

Kiwi falls on RBNZ statement 

Last week, the New Zealand Dollar tumbled when the Reserve Bank of New Zealand (RBNZ) suggested that it may look to cut interest rates in the near future. The news caused both the Aussie and Kiwi Dollars trade lower against other currency majors. There isn’t a lot of economic data expected from New Zealand this week, leaving the Kiwi Dollar sensitive to developments elsewhere. However, another dairy auction is due to take place, and the result could impact the NZD’s value given dairy is the nation’s largest commodity. 

Canadian Dollar - CAD 

Loonie ends Q1 on upbeat vote  

The Canadian Dollar reached a one-week high against the US Dollar on Friday after positive domestic data emerged; the Canadian currency has finished Q1 around 2.0% higher. There are a few events to watch for in the week ahead that could impact the Canadian Dollar exchange rate. Canadian manufacturing figures will be out later in Monday’s session, and Bank of Canada (BoC) Governor Stephen Poloz will also be making a speech—both developments could move the Loonie exchange rate. CAD exchange rate movement could be inspired again on Friday, with the latest Unemployment Rate and Net Change in Employment figures due to reach markets.