Weekly Report – 19th April to 22nd April 2022

Friday 22nd April -There was a sharp drop in the Pound following the release of data that indicated that UK retail sales had dropped by 1.4% during March, coming in above expectations. There was also a drop in UK services PMI and this fuelled the ongoing concerns around the cost of living crisis, all of which put pressure on the currency.

 

In contrast, the Euro managed to strengthen against many of its peers after there was an improvement in Eurozone growth during April. Business activity increased and a strong recovery in the service sector all helped to boost the single currency.

It was a solid day for the US Dollar as it strengthened following comments from the Federal Reserve Chair Jerome Powell. This helped the Greenback to gain some momentum while a risk-off mood also helped to enhance the appeal of the US Dollar during trading.

Thursday 21st April

The Partygate scandal still caused problems for the Pound as it faced an uncertain day of trading with political turbulence leaving it struggling. However, it did make up ground during the afternoon as it moved ahead of many of its weaker peers following news that the Bank of England could implement a 50-bps rate rise at the next meeting.

The Euro surged at the start of the day as the European Central Bank indicated that it might take a hawkish stance moving forward. This helped to bolster the single currency initially although it did slow down during the afternoon after the Eurozone inflation rate was revised downwards.

After starting the day on the back foot as a result of a lack of economic data, the US Dollar did manage to turn things around during the afternoon. As impressive jobs data was released as well as improving US Treasury yields and strong comments from the Federal Reserve, the Greenback rallied after gaining support.

Wednesday 20th April

The Pound faced turbulence during trading and that means that it eventually lost ground against many of its peers. Following the Partygate scandal and the surrounding political uncertainty, the Pound came under further pressure although it did gain some support from an upbeat mood.

It was a choppy day for the Euro as it reacted to mixed data. The balance of trade for the Eurozone came in ahead of expectations at €-7.5 bn as opposed to the expected €-29bn. The currency might also have been boosted by hawkish comments from officials at the European Central Bank although the Euro wasn’t able to keep up with its peers.

The US Dollar lost ground as a risk-on market mood meant that demand dropped. Along with this, there was additional pressure on the safe-haven currency following a pullback in US Treasury yields.

Tuesday 19th April

There was a lack of data which meant that the Pound fluctuated during trading. The market mood shifted and this caused the currency to suffer from instability causing it to rise initially before moving lower after sentiment caused it to drop.

During the European session, the Euro rose, making up for any overnight losses while the downbeat mood around the Ukraine crisis didn’t hold it back. The single currency might have been given a boost by the latest polls in the French presidential election as Macron looks to have taken a lead over his rival Marine Le Pen.

It was a volatile day for the US Dollar as a lack of data and a shift in market mood meant that the Greenback experienced some turbulence. Despite this, it was looking likely that the Federal Reserve would take hawkish action and that helped to keep the currency ahead of its rivals.

Currency Ranges for the week:

GBP/USD: Low: 1.28252 High: 1.30864

GBP/EUR: Low: 1.18839  High: 1.20767

EUR/USD: Low: 1.07676  High: 1.09287

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