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Resilient Eurozone trade may return euro to stronger footing

business-articlesResilient Eurozone trade may return euro to stronger footing
  • Euro under pressure ahead of Eurozone trade data
  • Rising inflation encourages Canadian dollar
  • US dollar slides after surprise retail sales contraction
 
 Widened Eurozone trade surplus may encourage euro demand
 
The euro failed to find much in the way of support yesterday even as the German economy avoided a contraction in the first quarter.
 
While growth showed signs of picking back up in the first three months of 2019, though, investors remain wary over the economic outlook.
 
A boost could be in store for EUR exchange rates this morning if March’s Eurozone trade balance demonstrates a widening of the surplus.
 
If trade conditions show signs of weakening, however, the appeal of the single currency is likely to diminish further.
 
 
Manufacturing sales rebound to offer Canadian dollar boost
 
After the headline Canadian consumer price index picked up from 1.9% to 2.0% yesterday CAD exchange rates saw an easing in downside pressure.
 
With inflation now matching the Bank of Canada’s (BOC) target rate the risk of future monetary loosening appears to have eased, to the benefit of the Canadian dollar.
 
CAD exchange rates could gain further traction this afternoon if March’s manufacturing sales data rebounds as forecast.
 
Investors anticipate a solid month of growth in manufacturing sales, a result which would ease worries over the outlook of the economy and shore up the Canadian dollar.
 
 
US dollar looks to recover from retail sales decline
 
A surprise decline in US advance retail sales saw the US dollar fall out of favour on Wednesday as the prospect of weaker consumer spending spooked investors.
 
Even so, USD exchange rates may rally today on the back of a rebound in April’s US housing starts and building permits figures.
 
Signs of resilience within the US construction sector could improve confidence in the outlook of the wider economy, diminishing the impact of ongoing trade tensions.
 
On the other hand, if housing construction continues to weaken this may drive the US dollar lower against its rivals.
 
 
Upcoming Data:
 
Thursday, 16th May 2019
10:00 EUR Eurozone Trade Balance
13:30 CAD Manufacturing Sales
13:30 USD Housing Starts
13:30 USD Building Permits
 
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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