The greenback extended lower against all of the major currencies with sterling leading the gains. Aside from CPI and retail sales, the Empire State and Philadelphia Fed surveys are scheduled for release. A number of Federal Reserve officials will also speak. On Sunday, Fed Chairman Powell said the U.S is at an inflection point, the outlook brightened significantly and with America going back to work, the economy will start growing more quickly. He also cautioned against reopening too quickly and stressed the importance of taking steps to avoid flare-ups in virus cases that could set back the recovery. Euro kicked off this busy trading week with modest gains against the U.S dollar. Despite continued lockdowns in some of the region’s biggest economies, slow vaccine rollout and lower growth forecasts from France and Spain, the single currency has been extraordinarily resilient. It quietly moved higher since the beginning of the month rallying from 1.17 to 1.19. Better than expected retail sales data helped extend the pair’s gains yesterday. Consumer spending rose 3% in the Eurozone in February, double the market’s expectations. Spending in January was also revised up to -5.2% from -5.9%. This follows last week’s upwardly revised German PMIs and the strongest German business confidence since June 2019. So while the near term outlook is grim, the recovery is delayed not threatened and that prospect keeps economic activity going. The question now is how much longer can the rally continue with U.S inflation and retail sales numbers scheduled for release this week. Vaccinations and stimulus checks should drive strong spending in March. Economists are looking for 5.7% rise but the numbers could easily beat expectations. Inflation is also on the rise and between these two reports, we could see renewed demand for the greenback. Add to that the possibility of Germany lowering its growth forecasts and there’s a good chance the rally could fizzle quickly this week once U.S CPI numbers are released. Before that, the German ZEW survey is due and it will be interesting to see if investor confidence is finally dented by recent lockdowns. Sterling traded sharply higher ahead of today’s industrial production, monthly GDP and trade balance reports.
Euro
The single currency posted slight gains in yesterday’s trading session. The euro has been on a steady decline since mid-February, but reversed directions and gained 1.19% last week, its best weekly performance since mid-December. If the upward trend continues, the euro could pressure the symbolic 1.20 line as early as this week. Overall, the EUR/USD traded with a low of 1.1865 and a high of 1.1918 before closing the day around 1.1899 in the New York session.
Yen
The Japanese Yen gained yesterday as the dollar slipped yesterday towards a three-week low as Treasury yields traded near recent lows and traders awaited crucial U.S inflation and retail sales data in coming days. The dollar’s performance has been tied to U.S Treasury yields for most of 2021, after concern about rising inflation in the United States. Overall, the USD/JPY traded with a low of 109.19 and a high of 109.94 before closing the day around 109.64 in the U.S session.
British Pound
The British Pound rose yesterday, recovering partly after a weekly loss. The UK’s vaccine rollout - one of the fastest in the world - helped the pound have its best quarter since 2015 in the first three months of 2021. With vaccinations now fading as a driver of GBP, investor attention should turn to the sustainability of economic growth. Overall, the GBP/USD traded with a low of 1.3668 and a high of 1.3748 before closing the day at 1.3702 in the New York session.
Canadian Dollar
The Canadian Dollar edged down against its U.S counterpart in yesterday’s trading session, unwinding some of the gains logged in the previous session, but buoyant oil prices helped keep the currency near recent highs. Investors' expectation for a continued rise in U.S Treasury yields has been supportive of the greenback. Overall, USD/CAD traded with a low of 1.2522 and a high of 1.2608 before closing the day at 1.2530 in the New York session.
Australian Dollar
The Australian Dollar opened the week slightly lower as investor mood soured following setbacks in the country’s vaccination program, while the New Zealand dollar was little changed. Australia has abandoned a goal to vaccinate nearly all of its 26 million population by the end of 2021 following advice that people under the age of 50 take Pfizer’s COVID-19 vaccine rather than AstraZeneca’s shot. Overall, AUD/USD traded with a low of 0.7649 and a high of 0.7659 before closing the day at 0.7616 in the New York session.
Euro-Yen
EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is issuing a bearish stance. The Relative Strength Index is above 59 and lies above the neutral zone. In general, the pair has gained 0.25%.
Sterling-Yen
Currently, GBP/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish tone and MACD is also indicating a bearish stance. The Relative Strength Index is above 48 reading and lies above the neutral zone. On the whole, the pair has gained 0.15%.
Aussie-Yen
Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bullish tone and MACD is also indicating a bullish stance. The Relative Strength Index is above 48 reading and lies above the neutral region. In general, the pair has lost 0.09%.
Euro-Sterling
This cross is currently trading below 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish tone and MACD is also issuing a bullish signal. The Relative Strength Index is above 60 and lies below the neutral region. Overall, the pair has gained 0.12%.
Sterling-Swiss
This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is also indicating a bullish tone. The Relative Strength Index is above 40 and lies above the neutral region. In general, the pair has lost 0.20%.
Disclaimer
This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.
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