Economic data in focus as banks look at monetary policy
Pound - GBP
More political uncertainty ahead?
The Pound remained relatively unchanged last week despite a Brexit extension being granted by the European Union. However, concerns that this extension could open the door to more political uncertainty, with prospects for a general election, could keep some pressure on the Pound in the coming months. In terms of economic data, Tuesday could be an interesting day for the Pound when the latest UK labour market stats are revealed, followed by inflation numbers on Wednesday. Bank of England (BoE) representatives will also speak on Wednesday, which could impact the Pound, and Sterling will also be sensitive to any Brexit developments.
Euro - EUR
Euro dulls as ECB paints dovish picture
The Euro came under pressure last week after European Central Bank (ECB) Chief Mario Draghi made some dovish comments at a press release following the bank’s decision to keep interest rates on hold. However, the common currency gained some ground against the US Dollar on Friday. There are a few pieces of economic data due out in the week ahead which might impact the Euro’s value. Tuesday will see the latest round of ZEW economic sentiment surveys out for the Eurozone and Germany, which may offer some significant opportunity for the Euro to move. Meanwhile, Wednesday will see the final inflation readings for March released.
US Dollar - USD
US data in focus
The US Dollar to Euro (USD/EUR) exchange rate sank to its weakest level in two weeks on Friday as risk appetite increased and news of business deals between Japan and Germany circulated. This week, the US industrial, manufacturing, and services sectors will come into focus with economic data due to detail recent productivity. Thursday will also see the release of the latest US Advance Retail Sales figure which may provide some significant US Dollar movement.
Australian Dollar - AUD
'Decent' economic data could avoid rate cut
Last week, the Aussie Dollar hovered near six-week highs after weaker US data allowed other currencies to gain. Central banks are in focus at the moment as markets try to predict the most likely path of monetary policy. The Reserve Bank of Australia (RBA) will release its meeting minutes from its April meeting on Tuesday and markets will be looking for any further signs of dovishness that may hint a rate cut is soon on the way. Last week, Deputy Governor Guy Debelle stated that ‘decent’ economic growth in the coming months could be enough to ward away a rate cut, so data releases in the short-term could be significant for AUD direction. Meanwhile, Wednesday will see the latest Westpac Leading Index released, followed by Business Confidence, Employment Change, and Unemployment Rate stats on Thursday.
New Zealand Dollar - NZD
Will the RBNZ cut in May?
Last week, comments from the Reserve Bank of New Zealand (RBNZ) suggesting a possible rate cut could occur in May dampened the Kiwi Dollar. This week begins with the New Zealand Performance of Services Index softening from 53.6 to 52.9, remaining above the 50.0 level which separates expansion from contraction. Tuesday could be an exciting day for Kiwi Dollar movement when the latest New Zealand inflation figure reaches markets. It’s expected a small slip in inflation could occur from 1.9% to 1.7%—economic data from New Zealand will be closely watched as markets try to determine when or if the Reserve Bank of New Zealand might actually make a rate cut.
Canadian Dollar - CAD
Canadian Dollar strengthens on oil prices
The Canadian Dollar has strengthened this year climbing 2.4% against the US Dollar, as oil prices have been increasing. However, should the surge in crude prices hesitate, the Canadian Dollar may not have much opportunity to gain further in the near-term. There are a few economic data releases out in the week ahead which may impact the value of the Canadian Dollar. Monday begins with the Existing Home Sales stat for March, which came in at -9.1% in February. Meanwhile, Wednesday may be more influential with the March inflation number. Thursday will close the week for Canadian economic data with the Canadian Retail Sales stat.