Weekly Round-Up & The Week Ahead

Weekly round-up and a look at the week ahead for EUR, GBP, and USD.

DAILY ANALYSIS

USD

The Dollar declined to three-year lows last week driven by controversial reports that President Trump may remove Federal Reserve Chair Jerome Powell following conflicting views on the speed of rate cuts however, markets began to settle as Trump clarified his position later in the week stating he had ‘no intention of firing Powell’. Trump also gave the greenback a much-needed boost signaling that there is willingness to lower tariffs in a potential trade deal with China. PMI’s released late on Wednesday showing an expansive US economy with both manufacturing and services reading above the 50 level however, composite did drop back to 51.2 from 53.5 last time out. Thursday saw the release of Durable Goods Orders for March reading at a whopping 9.2% vs 2% expected and 0.9% last time out. The Dollar remains under the spotlight this week amid uncertainties surrounding trade and upcoming data releases.

This week begins with data at a premium. The Federal Reserve’s preferred measure of inflation in Core PCE is released on Wednesday, quickly followed up by GDP. On Thursday, ISM Manufacturing PMI is released and on Friday the latest reading of Nonfarm. Data will be heavily scrutinized this week as analysts comprehend how President Trumps trade policies impact the US economy.

EUR

Euro remained the best performing currency of the G3 last week as we saw GBP/EUR remain comfortable in its newfound range of 1.17 and EUR/USD elevated in the 1.13’s although down from the near 1.15’s before the bank holiday. ECB President Christine Lagarde spoke at the IMF meetings commenting that she hoped rumors of Trump removing Fed Chair Jerome Powell were unfounded and that she hoped this was ‘not on the table’. Lagarde also commented on US-EU trade negotiations saying that ‘it’s in the nature of policymakers to want to sit down and argue their case’ but that she was confident of a dialogue between the two regions due to the ‘joint interest’ between them. PMI’s were the only high-impact data released from the week with both readings showing a contraction below the 50 level, as Manufacturing reported at 48.7 and services at 49.7.

A quiet start to the week for the single currency on the data front before GDP on Wednesday and Core HICP on Friday. Reports this morning suggest that GBP/EUR could return to the 1.18’s this week ahead of the key psychological level of 1.20 in coming weeks.

GBP

A quiet start for Sterling last week following the bank holiday weekend with the only high-impact data coming in the form of PMI’s on Wednesday and Retail Sales on Friday. Sterling did come under pressure following the IMF downgrading growth forecasts for the UK from 1.6% to 1.1% highlighting concerns raised last year from the Autumn budget. Chancellor Rachael Reeves did however remain hopeful of a US-UK trade deal as she met her US counterpart Scott Bessent in Washington DC at the IMF’s Spring Meetings. On Wednesday bearish PMI releases for the UK weighed heavy on Sterling with contractions on both services and manufacturing at 48.9 and 44 respectively. Retail Sales for March did recover some of the week’s losses with a reading of 0.4% vs -0.4% expected and 0.7% last time out.

No high-impact data to report this week for Sterling with movement likely to be driven by its G3 counterparts.

Daily Rates

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