Monthly Currency Report – April 2024

Friday 26th April – The pound (GBP) experienced fluctuations at the end of last week due to a lack of significant UK economic data, leaving Sterling without a clear direction. Additionally, ongoing speculation regarding potential interest rate cuts by the Bank of England (BoE) may have contributed to the mixed movement of the pound.


Conversely, the euro (EUR) faced widespread declines at the close of last week’s session amid ongoing speculation that the European Central Bank (ECB) would be among the first major banks to implement interest rate cuts. Furthermore, the euro’s strong negative correlation with the US dollar (USD) added pressure to the currency.

Despite a challenging week, the US dollar managed to recover ground on Friday, propelled by a core PCE price index that exceeded expectations. The Federal Reserve’s preferred inflation measure remained steady at 2.8% in March, defying forecasts of a decrease to 2.6%. This renewed the recent decline in expectations for Fed rate cuts, thereby bolstering the USD.

Thursday 25th April

The pound (GBP) saw some positive movement on Thursday as diminishing expectations of interest rate cuts by the Bank of England (BoE) supported Sterling. However, gains for GBP were limited by a decline in UK retail sales reported by the Confederation of British Industry (CBI).

Meanwhile, the euro (EUR) experienced mixed performance on Thursday, despite hawkish remarks from two European Central Bank (ECB) policymakers. Comments from Isabel Schnabel and Madis Muller suggested that the pace of interest rate cuts may be slower than currently anticipated by markets, providing some support for the single currency. However, many EUR investors disregarded these remarks.

The US dollar (USD) encountered volatility on Thursday following the release of the latest US GDP growth rate, which indicated a sharper-than-expected slowdown in the American economy during the first quarter of 2024. US GDP decelerated from 3.4% to 1.6% in the first quarter, falling below the forecasted 2.5% growth. The USD initially surged as the release dampened market sentiment, but quickly retraced its gains, reaching some of its lowest levels in two weeks.

Wednesday 24th April

The pound (GBP) showed mixed movement on Wednesday following a combination of mid-tier data from the Confederation of British Industry (CBI). Although the CBI reported a significant improvement in business confidence for the second quarter of 2024, it also indicated a notable decline in industrial orders this month.

Similarly, the euro (EUR) remained subdued on Wednesday, despite a larger-than-expected increase in Germany’s business climate index for April. Although companies in the Eurozone’s largest economy expressed the most optimism since May 2023, expectations of impending interest rate cuts by the European Central Bank (ECB) weighed on the EUR.

Meanwhile, the US dollar (USD) managed to recover some of its losses from Tuesday on Wednesday, supported by an uptick in US Treasury yields. Stronger growth in US durable goods orders also provided support for USD exchange rates, although the currency’s upward momentum appeared limited.

Tuesday 23rd April

The pound (GBP) saw a boost on Tuesday following remarks from Bank of England (BoE) Chief Economist Huw Pill, who advised against premature interest rate cuts. This contradicted recent statements from other BoE officials. Moreover, the UK’s services PMI for April unexpectedly surged, signalling that activity in this critical sector had reached its highest level since May 2023.

In contrast, the euro (EUR) gained ground against its weaker counterparts on Tuesday after the Eurozone’s preliminary PMIs revealed a faster-than-expected acceleration in service sector activity. However, the euro’s gains were limited by a worsening contraction in the bloc’s manufacturing sector, leaving it susceptible against stronger currencies.

Meanwhile, the US dollar (USD) encountered difficulties on Tuesday as an improved market sentiment diminished demand for the safe-haven currency. Later in the day, the US PMIs for April revealed an unexpected slowdown in US business activity, adding further pressure on USD exchange rates.

Monday 22nd April

The pound (GBP) plunged to new multi-month lows on Monday as markets priced in the likelihood of an interest rate cut from the Bank of England (BoE) in August. Following dovish remarks from BoE policymakers last week, analysts now anticipate a 50 basis point rate cut in August rather than September. This led to a significant sell-off of the pound.

Conversely, the euro (EUR) weakened on Monday as a risk-on sentiment diminished demand for the safer single currency against its riskier counterparts. Additionally, the Eurozone’s latest consumer confidence index came in lower than expected, adding further pressure on the EUR.

Meanwhile, the US dollar (USD) traded without a clear direction on Monday as an improved market sentiment reduced demand for the safe-haven currency. However, the ongoing pullback in Federal Reserve rate cut expectations helped support the USD.

Friday 19th April – The pound (GBP) saw a decline at the close of last week following dovish remarks from Bank of England (BoE) Deputy Governor Dave Ramsden. Speaking in Washington DC, Ramsden expressed confidence that UK inflation would sharply decline in April, nearing the bank’s 2% target. These comments fueled speculation of potential BoE interest rate cuts, consequently undermining Sterling.

Conversely, the euro (EUR) experienced broad gains on Friday after Germany’s producer price index exceeded forecasts. With wholesale inflation unexpectedly rising in the Eurozone’s largest economy last month, investors slightly adjusted their expectations regarding the pace of the European Central Bank’s (ECB) rate-cutting cycle.

Meanwhile, the US dollar (USD) trended slightly lower during Friday’s session as the safe-haven currency struggled to attract support amid a cautiously optimistic market sentiment. Investors seemed hopeful that recent tensions between Israel and Iran were easing after the two countries engaged in drone strikes earlier in the week.

Thursday 18th April

The pound (GBP) faced challenges in finding a clear direction on Thursday due to a lack of significant UK economic data. Mixed expectations regarding the timing of potential Bank of England (BoE) interest rate cuts also influenced GBP, following Wednesday’s stronger consumer price index and dovish comments from BoE Governor Andrew Bailey.

The euro (EUR) softened on Thursday as expectations for a European Central Bank (ECB) rate cut in June intensified. ECB Vice-President Luis de Guindos clearly signaled that if the recent inflation trend persists, the bank will commence rate cuts at its next meeting in two months’ time, weakening support for the EUR.

Meanwhile, the US dollar (USD) found support on Thursday from an uptick in US Treasury yields amid market expectations that the Federal Reserve will not aggressively cut interest rates this year. Better-than-forecast US jobless claims further supported the USD, although a cautiously optimistic market sentiment limited the safe-haven currency’s potential.

Wednesday 17th April

The pound (GBP) initially trended higher on Wednesday, buoyed by stronger-than-expected UK inflation figures, causing investors to trim their Bank of England (BoE) interest rate cut bets. However, subsequent comments from BoE Governor Andrew Bailey regarding a projected ‘strong drop’ in April inflation reversed Sterling’s gains.

Similarly, the euro (EUR) faced downward pressure on Wednesday following the release of the Eurozone’s CPI data, which confirmed a cooling of inflation to a 28-month low in March. Despite this, the euro’s negative correlation with the US dollar (USD) helped limit its losses.

However, the US dollar encountered resistance on Wednesday as a generally positive market sentiment reduced demand for the safe-haven currency. Additionally, a modest pullback in US Treasury yields contributed to undermining the ‘greenback’.

Tuesday 16th April

The pound (GBP) faced pressure on Tuesday following a rise in UK unemployment and slowing wage growth. However, Sterling still managed to strengthen against its weaker peers, indicating that although the labour market report was worse than expected, earnings outpaced inflation, resulting in real wage growth reaching a two-and-a-half-year high.

The euro (EUR) received support on Tuesday after Germany’s economic sentiment index surpassed forecasts, reaching its highest level in over two years. With optimism growing for the ninth consecutive month in the Eurozone’s largest economy, the common currency strengthened, despite a softening against stronger rivals.

The US dollar (USD) remained range bound on Tuesday, holding near a five-month high, supported by cautious market sentiment. Despite hawkish remarks from Federal Reserve Chair Jerome Powell, the ‘greenback’ failed to make significant gains.

Monday 15th April

The pound (GBP) experienced mixed results on Monday as a lack of significant UK economic data contributed to heightened volatility. While Sterling strengthened against its weaker rivals, it struggled against stronger counterparts.

Similarly, the euro (EUR) faced selling pressure on Monday, despite a recovery in Eurozone industrial production in February. Comments from several European Central Bank (ECB) officials weighed on the EUR, as policymakers signalled that the bank would likely begin cutting interest rates in June.

The US dollar (USD) started the week subdued as investors took a breather following last week’s impressive rally. However, the ‘greenback’ edged higher in the afternoon following the release of far stronger-than-expected US retail sales data.

Friday 12th April

The pound (GBP) displayed considerable volatility on Friday following a mixed bag of UK GDP results. While January’s GDP figure was revised up from 0.2% to 0.3%, the UK’s economic growth slowed to 0.1% in February, raising concerns about the resilience of the British economy.

Initially under pressure, the euro (EUR) staged a recovery during Friday’s session after the European Central Bank’s (ECB) dovish commentary from its policy decision on Thursday continued to weigh on the currency. Amid a bearish market sentiment, the euro, perceived as a safer option, regained ground against its riskier counterparts during US trading hours.

In contrast, the US dollar (USD) soared to a fresh five-month high on Friday, marking its strongest performance in over a year, as markets scaled back expectations of Federal Reserve interest rate cuts. Additionally, a risk-off market sentiment bolstered the safe-haven appeal of the ‘greenback’, with investors growing increasingly apprehensive about the potential for direct conflict between Israel and Iran.

Thursday 11th April

The pound (GBP) initially found support on Thursday after Bank of England (BoE) policymaker Megan Greene pushed back against interest rate cut speculations. However, Sterling eventually slipped lower against its stronger counterparts as the session progressed.

Meanwhile, the euro (EUR) faced downward pressure against most of its rivals following the European Central Bank’s (ECB) April interest rate decision. Although the ECB kept rates unchanged, its explicit mention of impending rate cuts, particularly in June, convinced markets of an impending shift.

The US dollar (USD) experienced profit-taking on Thursday after hitting a five-month high in the wake of Wednesday’s US inflation release. Furthermore, an improving market sentiment diverted some support away from the safe-haven ‘greenback’.

Wednesday 10th April

A lack of fresh UK economic data contributed to heightened market volatility on Wednesday, with the pound (GBP) trading within a wide range against its counterparts. Amid a souring market sentiment, the increasingly risk-sensitive UK currency declined against safer options but gained traction elsewhere.

Similarly, the euro (EUR) struggled to establish a clear direction on Wednesday, mirroring the fluctuating market sentiment. Despite rallying against riskier peers as sentiment deteriorated in the afternoon, the euro faced challenges amid the shifting market dynamics.

In contrast, the US dollar (USD) surged on Wednesday after the release of America’s latest consumer price index, which surpassed forecasts. With both headline and core inflation exceeding expectations, markets revised down expectations of Federal Reserve rate cuts, propelling the USD higher.

Tuesday 9th April

Tuesday saw the pound (GBP) being largely influenced by market sentiment due to a lack of significant UK economic data. As market mood improved, the GBP strengthened against safer counterparts while weakening against riskier rivals.

Meanwhile, the euro (EUR) faced declines against stronger rivals amidst growing anticipation of a dovish shift at the European Central Bank’s upcoming interest rate decision. Nevertheless, the euro managed to gain ground against weaker counterparts, benefiting from its negative correlation with a softer US dollar (USD).

The US dollar (USD) initially declined on Tuesday, hitting a two-week low against certain currencies, driven by a risk-on market sentiment and a drop in US Treasury yields. However, sentiment turned sour during US trading hours, aiding the USD in recovering losses.

Monday 8th April

The pound (GBP) struggled to find direction at the start of the week, given the absence of significant British economic data. Exposed to market risk dynamics, the GBP remained steady against safer peers but weakened elsewhere amid an improving market sentiment.

Similarly, the euro (EUR) traded within a wide range on Monday following mixed German data, with trade and industrial production reports diverging from forecasts. Despite support from its negative correlation with a weakening US dollar (USD), the euro was affected by the prevailing risk-on market mood.

The US dollar (USD) began the week on a decline as demand for the safe-haven currency dwindled amid a cautiously optimistic market sentiment. Positive developments in Israel-Hamas peace talks and reports of Israel withdrawing troops from South Gaza contributed to the improved market mood.

Friday 5th April – The pound (GBP) closed the week on a subdued note as a lack of significant UK economic data left the currency without a clear direction. With no strong catalysts to guide its movement, Sterling oscillated within a wide range and ceded ground against its stronger counterparts.

Similarly, the euro (EUR) lacked momentum during Friday’s session following disappointing economic data from the Eurozone. Retail sales in the region contracted more than anticipated in February, while Germany’s factory orders grew at a slower pace than expected during the same period.

Conversely, the US dollar (USD) surged higher on Friday after the release of the latest US non-farm payrolls report, which exceeded forecasts. The US economy added 303,000 jobs in March, surpassing expectations of 200,000 and signalling an acceleration in job growth. However, the ‘greenback’ pared back some of its gains by the session’s end.

Thursday 4th April

The pound (GBP) encountered hurdles during Thursday’s session following a downward revision of the UK’s final services PMI. March’s reading came in at 53.1, indicating a faster-than-expected slowdown in service sector activity.

Meanwhile, the euro (EUR) advanced against its weaker counterparts on Thursday after the Eurozone’s final services PMI for March was revised higher, showing a faster-than-anticipated acceleration in growth. However, the European Central Bank’s (ECB) meeting minutes strengthened the case for a potential rate cut in June, dampening the euro’s potential.

In contrast, the US dollar (USD) extended its decline on Thursday following weaker-than-expected services PMI data and dovish comments from Federal Reserve Chair Jerome Powell. The USD faced additional losses in the afternoon as the latest initial jobless claims figure rose more than anticipated.

Wednesday 3rd April

The pound (GBP) faced challenges on Wednesday, slipping against its stronger rivals as the absence of significant UK economic data left the currency vulnerable to losses. Furthermore, speculation that the Bank of England (BoE) might consider interest rate cuts in June added pressure on Sterling.

Meanwhile, the euro (EUR) managed to gain ground on Wednesday despite a cooler-than-expected Eurozone consumer price index for last month. Benefiting from its strong negative correlation with a declining US dollar (USD), the common currency shrugged off the cooler CPI figures.

Conversely, the US dollar (USD) experienced a decline on Wednesday after the release of the ISM services PMI, which fell short of expectations. Instead of showing a slight expansion in service sector activity as forecasted, March’s data revealed a slowdown in growth, leading to notable losses for the USD.

Tuesday 2nd April

The pound (GBP) received a boost on Tuesday following an upward revision of the UK’s final manufacturing PMI, indicating growth in factory activity last month. Although the reading was only slightly above the 50-point mark that distinguishes expansion from contraction, it marked the first positive PMI reading since July 2022.

Meanwhile, the euro (EUR) strengthened against its weaker counterparts on Tuesday, benefiting from its strong negative correlation with a declining US dollar (USD). However, a cooldown in German inflation tempered the euro’s gains, keeping alive the possibility of an interest rate cut from the European Central Bank (ECB) later in the month.

In contrast, the US dollar (USD) faced selling pressure on Tuesday as investors engaged in profit-taking after the currency reached its highest level since November 14th. Despite the latest US jobs openings figure exceeding forecasts, a downward revision to the previous month’s figure offset any potential upside for the USD.

Currency Ranges for the month:

GBP/USD: Low: 1.23107  High: 1.27003

GBP/EUR: Low: 1.1571  High: 1.17292

EUR/USD: Low: 1.06097   High: 1.08809



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