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Euro to recover ground on improved Eurozone business sentiment?

business-articlesEuro to recover ground on improved Eurozone business sentiment?
  • Euro looks for rally on Eurozone business confidence index
  • US dollar trends lower in spite of strong headline growth rate
  • Pound support limited ahead of BoE meeting
 
 Stronger Eurozone business confidence to boost euro
 
The mood towards the euro could improve this morning if April’s Eurozone business confidence shows a fresh uptick on the month.
 
Forecasts suggest that the headline index strengthened from 0.53 to 0.61 in the last month, reflecting a modest improvement in domestic sentiment.
 
However, if the index eases once again this could leave the euro trending lower across the board this morning.
 
Unless the Eurozone economy demonstrates greater signs of resilience EUR exchange rates are likely to remain under pressure.
 
 
US dollar softens in spite of growth surge
 
Friday’s stronger-than-expected annualised first quarter gross domestic product failed to shore up the US dollar, even as growth accelerated to 3.2%.
 
As the underlying details of the report proved less encouraging in nature USD exchange rates lost some of their earlier momentum.
 
Demand for the US dollar could pick back up this afternoon, though, if March’s personal consumption expenditure core data also shows an improvement.
 
As the PCE remains the Federal Reserve’s preferred measure of inflation any uptick here could give policymakers greater cause for hawkishness.
 
 
Pound under pressure ahead of BoE meeting
 
Confidence in the pound looks set to remain muted this week as anticipation mounts for Thursday’s Bank of England (BoE) interest rate decision.
 
While no change in monetary policy is anticipated at this stage, given Brexit-based uncertainty, markets are wary of any potential shift in the outlook of policymakers.
 
If the latest round of Brexit discussions between the Labour leadership and Theresa May show signs of progress, however, this could help to improve the appeal of the pound.
 
Increased odds of the two sides reaching a compromise on Brexit in the near future would give GBP exchange rates a boost.
 
 
Upcoming Data:
 
Monday, 29th April 2019
10:00 EUR Eurozone Business Confidence Index
13:30 USD Personal Consumption Expenditure Core
 
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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