By Tom Arnold
As we return from the long Easter weekend, we once again find the currency markets reeling from Trump-derived volatility. Fears of a US economic slowdown as a consequence of the ongoing tariff fiasco, were compounded by attacks from President Trump on the head of the Federal Reserve Jay Powell. The ongoing independence from government of the Federal Reserve is in doubt with Trump furious that interest rates haven’t been cut more aggressively.
As a result of this the Dollar has weakened significantly – around 2% since the end of last week. This is great news if you have a US Dollar requirement coming up, but less good news for those of you with a Euro requirement. Typically when the US Dollar moves, the Euro does the opposite, as investors move between the two currencies to take advantage of yield, but also safety of their positions. With the Dollar so weak, the Euro has been the main winner, gaining over 5% against the Greenback in April so far. This has also led to GBPEUR dipping since the Tariff-war began. The GBPEUR rate is holding steady this morning, so far, but for how long given the pressure of the Dollar sellers?
It is likely a good opportunity to consider securing your Euros while the rate holds before more uncertainty potentially leaves your currency purchase costing you more.
This week’s important data is as follows:
Tuesday
European Consumer Confidence
FED members Jefferson/Kashkari/Kugler speeches
Wednesday
German Manufacturing & Services PMI
European Manufacturing & Services PMI
UK Manufacturing & Services PMI
US Manufacturing & Services PMI
BoE Governor Bailey Speech
FED members Goolsbee/Musalem/Waller speeches
Thursday
US Initial Jobless Claims
UK GfK Consumer Confidence
Friday
UK Retail Sales