The US dollar remained well supported on Friday, with the currency continuing to catch bids in light of the Federal Reserve’s recent hawkish shift.
Meanwhile, the pound is trading in narrow range so far this morning, with GBP/EUR muted at €1.1618 and GBP/USD stable at $1.4066. GBP/CAD is flat at C$1.7080, while GBP/AUD and GBP/NZD hold steady at AU$1.8166 and NZ$1.9560, respectively.
Coming up today, will a slowing of US retail sales leave the US dollar on the back foot today?
What’s been happening?The US dollar ticked lower during yesterday’s session following a drop in US Treasury yields, which prompted the ‘Greenback’ to relinquish some of its inflation-driven gains.
Tempering these losses however, were last week’s US jobless claims figures, which reported new claims had fallen to a new post-pandemic low, easing concerns over the US labour market.
This modest pullback in the US dollar, alongside optimism over the EU’s accelerating vaccine rollout and hopes for a strong economic recovery in the Eurozone, helped propel the euro higher on Thursday.
At the same time, the pound traded in a narrow range yesterday as hawkish comments from the Bank of England’s (BoE) Andy Haldane were offset by Boris Johnson’s admission that he feels ‘anxious’ over the Indian variant of the coronavirus.
What’s coming up?Turning to today’s session, the spotlight is likely to be on the latest US retail sales figures.
This could leave the US dollar on the defensive this afternoon as economists predict sales growth will have slowed significantly last month after being artificially inflated in March by the latest stimulus checks.
On the other hand, the University of Michigan’s latest consumer sentiment data could offer some support to the ‘Greenback’, on the expectation that consumer morale will have continued to improve this month.
For EUR investors, the focus today will be on the minutes from the European Central Bank’s (ECB) most recent policy meeting, as they look for clear signs regarding the bank’s stance on beginning to taper its bond purchases.
Finally, with UK data releases thin on the ground today, GBP investors may remain focused on UK coronavirus headlines, amidst concerns the next phase of lockdown easing could be delayed.
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)