​Euro and Pound Decreased Last Week (Weekly Review)

The calendar of the last week contained a number of important events, and in particular meetings of the Bank of Canada and the Bank of Japan, as well as release of data on durable goods orders and annual data on US GDP. As expected, both central banks did not make any changes in monetary policy; throughout the week the Japanese yen tried to strengthen across the whole spectrum of the market, but the growth of stock indices had a restraining effect on it, and the Canadian dollar was sold off along with rather soft comments from the Central Bank.

Last week, the euro and the British pound were mostly under pressure from the USD, as a result of which they tested the support levels of 1.1120 and 1.2865 respectively. Weak statistics for Germany and the Eurozone continues to negatively affect the dynamics of the single currency, and the continuing uncertainty about the prospects for Brexit and its impact on the UK economy negatively affects the dynamics of the pound. In recent days, these currencies, however, were able to gain back some of the losses, but their prospects still look negative.

American statistics in general continues to delight the bulls in the USD. The pause of the Fed in tightening monetary policy has somewhat weakened its position, but the interest rate differential still supports it. Thus, the euro and the pound risk a renewed decline against the dollar, while technical factors may contribute to testing the USD/JPY support around the 111th figure.

Schedule for this week:

Thursday, May 2
11:00 GMT – United Kingdom. Bank of England (BOE) Interest Rate Decision;
11:00 GMT - United Kingdom. Bank of England (BOE) Meeting Minutes;
11:30 GMT - United Kingdom. Bank of England Governor Mark Carney Speaks;
12:30 GMT - USA. Initial Jobless Claims;
14:00 GMT - USA. Industrial Orders (MoM) (Mar).

Friday, May 3
01:30 GMT - Australia. Building Permits;
07:30 GMT - Switzerland. Consumer Price Index (CPI);
09:00 GMT - Eurozone. Core Consumer Price Index (CPI);
09:00 GMT - Eurozone. Producer Price Index (PPI);
12:30 GMT - USA. Nonfarm Payrolls (Apr);
12:30 GMT - USA. Unemployment Rate;
12:30 GMT - USA. Average Hourly Earnings;
14:00 GMT – USA. ISM Services Purchasing Managers Index (PMI).

Author: Anthony Porter, IAFT Analyst