Markets Steady after Week of Volatile Trade as Recovery Hopes Continue to Rise

Pound News: Sterling Falls from Highs after Weeks of Gains

Today, the Pound’s persistent rallying once again saw a fresh bout of volatility. Investors opted to sell the Pound from its best levels in profit taking against some major rivals, despite lasting optimism around Britain’s economic reopening expectations.

Sterling is likely to remain fairly appealing overall though. While fresh optimism around the UK outlook is slowing, the UK is still expected to be one of the first major economies to recover from the pandemic for now.

UK services and composite PMI data from March will be published tomorrow, which is set to confirm service sector activity returned to expansion for the first time since October 2020.

Euro News: Eurozone Morale Rises despite Mixed Data as Recovery Hopes Rise

Today saw the publication of the Eurozone’s February unemployment rate report, which came in worse than expected at 8.3%.

Despite this and concerns over the Eurozone seeing more coronavirus restrictions, Sentix’s Eurozone investor morale index scored its best figure since 2018 in April. This boosted Euro demand slightly today.

The Eurozone’s March services and composite PMI report is due tomorrow, where stronger-than-expected PMI data could boost the Euro’s current recovery attempt.

US Dollar News: USD Remains Appealing as Rivals Attempt to Advance

The US Dollar pushed back against a Pound rally and is attempting to avoid further losses against the Euro today. While the US Dollar has slipped back after strong performance in late-March, the currency remains appealing overall.

This is due to broad US economic recovery hopes, combined with some lingering demand for safe-haven currencies.

US trade balance data could cause some US Dollar movement tomorrow, but the biggest focus will be the Federal Reserve’s March meeting minutes. If the Fed shows any shift in stance or signals, it could have a big impact on the US Dollar’s movement.

Canadian Dollar News: Stronger Commodity and BoC Hopes Buoy CAD

The Canadian Dollar remains generally appealing, holding fairly close to highs against the Pound. The Canadian Dollar has benefitted from a combination of rising US economic hopes and stronger commodity trade in recent weeks.

Rising speculation that the Bank of Canada (BoC) could reduce bond purchases at an upcoming policy decision also supported CAD appeal.

Canada’s February trade balance and March’s Ivey PMI are due tomorrow, which if they beat expectations could keep the Canadian Dollar appealing.

Australian Dollar News: ‘Aussie’ Steadies after Upbeat RBA

After being dragged lower by market risk-aversion in recent weeks, the Australian Dollar has been steadying this week. This morning’s Reserve Bank of Australia (RBA) policy decision saw a generally optimistic tone from the bank, which supported AUD as well.

Australian manufacturing PMI data will be published tomorrow. This as well as potential shifts in market risk and trade-sentiment will likely drive AUD in the coming sessions.

Upcoming Data

Wednesday, 7th April

00:00    Australian Services and Composite PMI

09:00    Eurozone Services and Composite PMI

09:30    UK Services and Composite PMI

13:30    Canadian Trade Balance

13:30    US Trade Balance

15:00    Canadian Ivey PMI

19:00    Fed Meeting Minutes