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Euro Rallies on ECB Hawkishness, Higher Oil Prices Continue to Benefit Canadian Dollar

Pound News: Weaker Wage Growth Could Dent GBP

Confidence in the Pound (GBP) picked back up at the start of the week even in the absence of any fresh domestic data.

As markets reassessed the tone of the Bank of England’s (BoE) May meeting minutes and the likelihood of policymakers raising interest rates before the end of 2018 GBP exchange rates found renewed support.

However, as forecasts point towards a dip in UK wage growth in the three months to March the mood towards the Pound could sour this morning.


Euro News: Hawkish ECB Commentary Boosts Single Currency

Comments from European Central Bank (ECB) board member François Villeroy de Galhau encouraged Euro (EUR) exchange rates to rally yesterday.

Investors reacted positively to the policymaker’s comment that guidance on the timing of an interest rate hike could come before the ECB exits its quantitative easing programme.

Even so, if the first quarter Eurozone gross domestic product shows a loss of momentum this could weigh heavily on the single currency.


US Dollar News: USD Volatility Forecast on Fed Comments

In the absence of any fresh US data US Dollar (USD) exchange rates continued to trend lower on Monday, lacking upside momentum.

As April’s advance retail sales figure is expected to show a weakening on the month this may encourage further USD selling this afternoon.

On the other hand, if Federal Reserve policymakers take a more hawkish tone in upcoming speeches the US Dollar could find fresh cause for confidence.


Canadian Dollar News: Strong Oil Prices Support CAD Exchange Rates

Oil prices remained on a bullish run at the start of the week, benefitting the commodity-correlated Canadian Dollar (CAD).

With market risk appetite picking up on the back of a softer US Dollar CAD exchange rates were able to push higher, even though doubts over the outlook of the oil market remain.

An uptick in April’s existing home sales data may offer a fresh boost to the Canadian Dollar today, increasing optimism in the outlook of the Canadian economy.


Australian Dollar News: ‘Aussie’ Sluggish in Spite of Higher Consumer Spending

While Australian credit card purchases picked up in March this failed to offer the Australian Dollar (AUD) any particular boost.

As the Reserve Bank of Australia (RBA) looks set to leave interest rates on hold for the foreseeable future the upside potential of AUD exchange rates remains limited.

Even so, if market risk appetite continues to improve this should limit the losses of the ‘Aussie’ in the short term.


Upcoming Data

Tuesday, 15 May

09:30     UK Average Weekly Earnings

10:00     Eurozone Gross Domestic Product

13:30     US Advance Retail Sales

14:00     Canada Existing Home Sales


Alastair Archbold

Currency Trader


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