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Markets Fluctuate as Investors Digest Global Inflation Reports while Risk-Sentiment Rises

Pound News: Sterling Remains Unappealing as UK Inflation Fails to Impress

Due to reports that cross-party talks are stalling, hopes of a quick resolution to Britain’s Brexit deadlock have faded and this has left the Pound unappealing overall this week. As a result, the British currency saw limp movement yesterday.

Sterling saw no notable shift in movement following the publication of the UK’s latest inflation stats. The inflation figures fell short of expectations, making investors more anxious that the UK is in for more months of weak economic performance.

Amid a lack of Brexit developments, today’s UK retail sales report could influence Sterling if it surprises investors. Retail sales data could give markets a better idea of how resilient consumer activity has been.

 

Euro News: Euro Resilient despite Eurozone Inflation Slowing as Forecast

Despite a lack of fresh supportive factors for the Euro, the shared currency saw relatively resilient performance yesterday as investors continued to bet that the Eurozone’s economic outlook was improving.

Demand for the Euro was little-affected by the morning’s Eurozone inflation rate stats from March, which slowed as expected. Officials noted that the Italian economic performance had been promising this year so far, which offered the Euro further support.

This week’s most influential Eurozone data will be published today. Markit’s April PMI projections will give investors a better idea of how the Eurozone economy is performing this month and will likely influence Euro movement if it surprises investors.

 

US Dollar News: USD Strength Limited as Risk-Sentiment Rises

The US Dollar remained one of the less-appealing major currencies yesterday, with the week’s US data continuing to indicate that US economic activity is slowing. As a result, investors were hesitant to hold onto the safe haven currency amid a rise in risk-sentiment.

During Wednesday’s Asian session, Chinese growth data impressed and made investors more willing to take risks. US wholesale inventories disappointed yesterday too, putting additional pressure on the US Dollar.

The week’s most influential US data will be published today, including March retail sales stats and April PMI projections from Markit. These could cause shifts in the perceived strength of US economic activity and could influence Federal Reserve interest rate hike bets.

 

Canadian Dollar News: Surprising Rise in Canadian Core Inflation Leaves CAD Surging

The Canadian Dollar was one of the most appealing major currencies yesterday, as a combination of factors left the currency with stronger support. Rising prices of oil, as well as stronger Chinese data, bolstered risk-sentiment.

On top of risk-sentiment though, GBP/CAD was supported by Canada’s March inflation results. While the overall figures met forecasts, the yearly core inflation rate unexpectedly jumped from 1.5% to 1.6%, rather than slowing to 1.3% as expected.

Today will round off the week with Canada’s February retail sales data and March employment figures from ADP. If these stats impress as well, Bank of Canada interest rate hike bets are more likely to rise.

 

Australian Dollar News: Strong Chinese Data Leads to AUD Gains

The Australian Dollar remained one of the more appealing currencies yesterday, as despite the Reserve Bank of Australia’s (RBA) cautious tone on monetary policy this week the currency has benefitted strongly from higher risk-sentiment.

As China is Australia’s biggest trade partner, the Australian Dollar saw a notable boost in demand when China’s Q1 growth rate remained at 6.4% year-on-year rather than slowing to 6.3% as forecast.

Still, depending on how investors digest this morning’s key Australian job market stats the Australian Dollar could still end the week lower.

 

Upcoming Data

 

Thursday, 18th April

02:30    Australian Job Market Report

08:15    French PMI Projections

08:30    German PMI Projections

09:00    Eurozone PMI Projections

09:30    UK Retail Sales

13:30    Canadian ADP Employment Change

13:30    Canadian Retail Sales

13:30    US Retail Sales

14:45    US Markit PMI Projections

15:00    US Business Inventories

 

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To keep up to date with the Euro, visit the Euro blog in our Currency News section.

 

David Bayliss

Senior Currency Broker

dbb@fcgworld.co.uk

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