By Kian Songra
To round up last week, Pound sterling progressed well over the Euro as on Friday the talks between Ukraine and the US failed to come to a meaningful end. Zelensky and Trump end up on a bitter note and the US seem to have thoughts on retracting its support agreements for Ukraine. With increased uncertainty in the markets and comments still dictating market movements, geopolitical news will likely continue to drive the markets.
Over the weekend UK Prime minister Keir Starmer said that European leaders have agreed to present a peace plan to Washington. The meeting is potentially a big step towards ending the 3-year long war. These positive steps and potential easing of the geopolitical tension would probably diminish the safe haven appeal of the US Dollar. Tariffs are still in regular conversations, and this will need to be closely watched.
This week
This week we have a big week ahead with key data releases that typically cause huge amounts of volatility. The highlight will be the release of the European inflation and interest rate decision. Regular readers will know that interest rates have been a main driver for the behaviour of the currencies. They are highly anticipated releases and typically a cut in the interest rate will cause a decrease in strength for the currency. Those with requirements upcoming should look at mitigating your risk by speaking with our team to assess your options.
Over across the pond, investors will pay close attention to a slew of US economic data, notably on the Nonfarm Payrolls (NFP) data for February, which will be released on Friday. The labour market data will influence market expectations for the Federal Reserve’s (Fed) monetary policy outlook. The Fed is expected to keep interest rates steady in the March and May policy meetings. Should this be the case, the US Dollar could be seen as desirable, as an signs of holding interest rates, will drive the support from international investors.
Economic Calendar:
Monday:
- EU inflation
- US ISDM manufacturing PMI
Tuesday:
- Australian Retail sales
Wednesday:
- Australian GDP
- EU PPI
- ISM services PMI
Thursday:
- EU Retail Sales
- ECB interest rate decision
- ECB press conference – ECB leader Christine Lagarde’s speech
Friday:
- Non Farm Pay Rolls
- Fed Chair Powell
- Canadian Unemployment