Euro US Dollar Exchange Rate Rallies to One-Month High Following Dovish Fed Comments

Pound Flat amidst Vaccine Rollout Concerns, GBP Steady against EUR and USD

The Pound struggled to find direction during yesterday’s session amidst the lack of any clear catalyst.

This left GBP investors to stew over concerns about the UK’s vaccination programme, and fears that the recent decision to stop the use of the AstraZeneca for under 30s could hurt the rollout and potentially even lead to delays to the government’s easing plans.

In the absence of any notable GBP data releases today, it’s likely investors could continue to look to UK coronavirus developments for fresh impetus for movement.

EUR Accelerates on USD Weakness, Euro Pound Holds Near Two-Month High

The Euro ticked higher yesterday, initially buoyed by the weakness of the US Dollar as well as a slightly better-than-expected Eurozone industrial production reading.

However, these gains were capped later in the session after the European Central Bank (ECB) President, Christine Lagarde, warned that Europe is ’clearly still dealing with the pandemic crisis’.

Turning to today’s session, Germany’s latest CPI figures may offer modest support to the single currency after confirming inflation in the Eurozone’s largest economy accelerated last month.

US Dollar (USD) Undermined by Dovish Fed

The US Dollar was mostly muted through Wednesday’s European trading session as a dip in US Treasury yields limited the appeal of the ‘Greenback’.

Federal Reserve Chair Jerome Powell then applied additional pressure to the US Dollar after he dismissed concerns over rising inflation and suggested that the bank is unlikely to begin raising interest rates until at the least the end of 2022.

Centre stage today will be the publication of the latest US retail sales figures. Economists are forecasting a sharp rebound in sales growth last month, which if correct, could see the US Dollar appreciate later this afternoon.

Canadian Dollar (CAD) Underpinned by Robust Oil Prices

The Canadian Dollar edged higher on Wednesday, with the oil-linked ‘Loonie’ able to draw support as a 2% rise in WTI crude prices reflected well on the currency.

Australian Dollar (AUD) Subdued as US-China Concerns Offset Upbeat Unemployment Data

The Australian Dollar was left mostly rangebound overnight on Wednesday as any gains stemming from a larger-than-expected drop in the unemployment rate to 5.6% last month were offset by fears over fresh tensions between the US and China.

New Zealand Dollar (NZD) Muted amid Weak Risk Appetite

The New Zealand Dollar also struggled to attract investors in overnight trade as US-China tensions sapped market risk appetite and dampened the appeal of the ‘Kiwi’.

Data Releases

13:30 CAD ADP Employment Change (Mar)

13:30 USD Retail Sales (Mar)

13:30 USD Initial Jobless Claims (10/Apr)

14:15 USD Industrial Production (Mar)