The US dollar was boosted as two members of the Federal Open Market Committee (FOMC) pushed back against the idea of another interest rate cut.
- Euro looks vulnerable ahead of Eurozone manufacturing and services PMIs
- Resilient UK retail sales set to shore up pound
- US dollar to recover ground on sales rebound
Weak Eurozone PMIs could drive fresh euro losses
A significant widening of the Eurozone trade surplus helped to shore up the euro yesterday, even as trade tensions with the US showed fresh signs of escalation.
However, the appeal of the single currency looks vulnerable to a fresh deterioration this morning unless April’s Eurozone manufacturing and services PMIs prove positive.
Forecasts point towards the manufacturing sector remaining in a state of contraction, though, with the German economy expected to show particular weakness.
This could see EUR exchange rates return to a downtrend, with confidence in the outlook of the Eurozone economy already limited.
Pound falters ahead of retail sales data
In the wake of yesterday’s weaker-than-expected UK consumer price index data the pound could struggle to return to a stronger footing.
With inflation still trending below the Bank of England’s (BoE) 2% target the chances of interest rates rising before the end of the year appear limited.
Even so, GBP exchange rates may find a rallying point this morning if March’s UK retail sales data strengthens as forecast.
As sales are expected to deliver another strong month of growth, with consumers continuing to shrug off Brexit concerns, the mood towards the pound could pick up.
US dollar looks for boost on retail sales rebound
A surprise narrowing of the US trade deficit was not enough to boost the US dollar yesterday, thanks to some positive Chinese growth data driving market risk appetite.
USD exchange rates could find a fresh boost this afternoon, though, as forecasts point towards advance retail sales rebounding on the month.
A month of positive sales growth is likely to encourage a greater sense of confidence in the outlook of the world’s largest economy, even as trade tensions show fresh signs of picking up.
On the other hand, if consumer spending fails to strengthen this could see the US dollar shedding further ground against its rivals today.
Thursday, 18th April 2019
09:00 EUR Eurozone Manufacturing PMI
09:00 EUR Eurozone Services PMI
09:30 GBP Retail Sales
13:30 CAD Retail Sales
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)