Better-than-expected UK retail sales figures helped to lift the pound away from its multi-month lows yesterday, with consumer spending holding up in spite of Brexit-based uncertainty.
- Euro looks for boost on Eurozone gross domestic product
- Rising inflation may encourage Canadian dollar gains
- Slowing retail sales to drag on US dollar
Euro softens in advance of growth data
EUR exchange rates could find a boost this morning if the first quarter Eurozone gross domestic product shows signs of resilient growth.
As long as the data echoes the modest uptick seen in the preliminary GDP release then the mood towards the euro is likely to see any improvement today.
On the other hand, the underlying details of the growth data could leave investors with less incentive to favour the single currency over its rivals.
Any evidence of weakness within the Eurozone economy, given the latest increase in global trade tensions, could drive the euro lower across the board.
Inflation uptick set to boost Canadian dollar
A strong rallying point could be in store for the Canadian dollar this afternoon on the back of April’s Canadian consumer price index report.
Forecasts point towards the headline inflation rate strengthening from 1.9% to 2.0%, matching the Bank of Canada’s (BOC) target.
This would give policymakers greater cause for confidence, suggesting that the underlying health of the Canadian economy remains solid.
A downside surprise, however, may prompt CAD exchange rates to fall into a sharp slump as the risk of further monetary loosening remains.
US dollar under pressure ahead of retail sales
After market risk aversion eased yesterday the US dollar failed to hold onto its earlier bullishness, even as trade tensions between the US and China remained elevated.
Demand for the US dollar could weaken further if April’s advance retail sales slow as forecast, with investors anticipating growth of just 0.2% on the month.
Evidence of increasing consumer caution would leave USD exchange rates exposed to a fresh bout of selling pressure as worries over the resilience of the world’s largest economy pick up.
If sales manage another strong month of growth, though, the US dollar may return to a stronger footing against its rivals.
Wednesday, 15th May 2019
10:00 EUR Eurozone Gross Domestic Product
13:30 CAD Consumer Price Index
13:30 USD Advance Retail Sales
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)