The FX market is gearing up for another exciting week of trading, with plenty of economic data releases and central bank speeches set to impact exchange rates. Here are some of the key events that could move the markets this week:
GBP
The pound made some gains against the US dollar last week, reaching levels not seen since June 2022, despite the Easter holiday slowing trading activity. This week, traders will be looking to see if the pound can build on these gains. Bank of England Governor Bailey is scheduled to speak twice on Wednesday, and his comments could provide insight into the central bank’s outlook on the UK economy and interest rates. On Thursday, UK GDP and Industrial Production data will be released, which could offer further clues on the strength of the economy and whether the pound can maintain its ‘safe-haven’ status.
EUR
Eurozone Retail Sales data is due on Tuesday, which could hint at the direction of the European Central Bank’s monetary policy. If the data shows strength in consumer spending, it could support the ECB’s hawkish stance. Furthermore, the euro could potentially benefit from the weakness of the US dollar, and traders will be closely watching EURUSD to see if it can make another run at the psychological level of 1.1000.
USD
Last week’s US jobs data was bullish for the US dollar, with upgraded NFP numbers for February and better-than-expected March figures. The unemployment rate also unexpectedly fell to 3.5%, which suggests that the Federal Reserve may have more room to raise interest rates in the coming months. This week, the market will focus on US CPI data on Wednesday and the FOMC minutes from the last rate decision. Both releases could potentially create USD strength. Furthermore, US Retail Sales data is set to be released on Friday, revealing whether US shoppers are resilient to persistent inflation or whether the ‘high street’ is suffering under rising prices.
Overall, it is set to be a busy week for FX traders, with plenty of market volatility opportunities. Keep an eye on the key data releases and central bank speeches to stay ahead of the curve.