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Euro to lose further ground on ECB dovishness

business-articlesEuro to lose further ground on ECB dovishness
  • Euro vulnerable ahead of ECB minutes
  • Anticipation ahead of US labour market data weighs on US dollar
  • Rising US oil stockpiles dent Canadian dollar
 
 
Dovish ECB minutes set to drive euro lower
 
EUR exchange rates are likely to come under fresh pressure this afternoon with the release of the European Central Bank’s (ECB) March meeting minutes.
 
The minutes are expected to show increased signs of dovishness among policymakers, further diminishing the prospect of any return to a monetary tightening bias in the months ahead.
 
If the ECB adopts a more cautious outlook on the Eurozone economy this could see the euro shedding further ground against its rivals.
 
However, any evidence of hawkishness within the central bank may offer a boost to the single currency.
 
 
US dollar under pressure ahead of payrolls report
 
As markets brace for tomorrow’s US non-farm payrolls report the US dollar may struggle to find any particular traction.
 
However, this afternoon’s initial and continuing jobless claims figures could offer USD exchange rates a boost if they point towards a tightening labour market.
 
Any easing in jobless claims could encourage the US dollar to return to a stronger footing, even as worries over the outlook of the US economy persists.
 
As long as market risk appetite remains elevated, though, this may leave the US dollar biased to the downside.
 
 
Canadian dollar softens as US oil inventories rise
 
After US oil inventories showed an unexpectedly sharp increase on the week the Canadian dollar came under renewed pressure.
 
With oil markets in a bearish mood CAD exchange rates may find some support on the back of this afternoon’s Ivey PMI.
 
If the Canadian economy shows signs of resilience this could help the Canadian dollar to recover some of its recent losses, even though the Bank of Canada (BoC) looks set to maintain a dovish outlook.
 
A continued sense of market optimism could also benefit CAD exchange rates if the US and China show fresh signs of progress towards a fresh trade agreement.
 
 
Upcoming Data:
 
Thursday, 4th April 2019
12:30 EUR European Central Bank Meeting Minutes
13:30 USD Jobless Claims
15:00 CAD Ivey PMI
 
Philip McHugh

Philip McHugh

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)

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