Pound Subdued amid Coronavirus Concerns
The Pound (GBP) was mostly subdued on Friday as concerns rise over the spread of the Indian variant of the coronavirus in the UK and its potential impact on the UK’s reopening.
In a press conference, Boris Johnson warned that the current plan to fully reopen the economy next month could be delayed due to the spread of the new strain.
Meanwhile, the Pound may prove buoyant at the start of this week’s session as the latest phase of lockdown easing sees more of the UK economy reopen today.
Euro Firms as ECB Forecasts Return to Growth
The Euro (EUR) rallied at the end of last week’s session following the publication of the minutes from the European Central Bank’s (ECB) most recent policy meeting.
While the minutes didn’t contain any major surprises, policymakers’ more upbeat outlook and expectations that the Eurozone will return to growth in the second quarter were enough to help the Euro to take advantage of a pullback in the US Dollar.
Turning to this week’s session, the Euro may prove subdued in the first half of the week as the Eurozone’s latest GDP figures are expected to reaffirm the bloc slumped into a recession at the start of 2021.
US Dollar Stumbles as Retail Sales Disappoint
The US Dollar (USD) closed last week’s session on a low after US retail sales printed below expectations in April.
While economists had been expecting retail sales to slow last month after March’s figures were inflated by the latest stimulus checks, stalling sales growth came as a shock and sent the ‘Greenback’ lower.
At the start of this week, the focus for USD investors will be on the latest Empire State manufacturing index, with another robust reading potentially lending support to the US Dollar.
Canadian Dollar Bolstered by Upbeat Data
The Canadian Dollar (CAD) struck higher on Friday as the currency was bolstered by a stronger-than-expected rise in wholesale sales in March as well as a strong uptick in oil prices.
Australian Dollar Dented by Underwhelming Chinese Data
After rallying on Friday, the Australian Dollar (AUD) was back on the defensive at the start of this week, as the China proxy ‘Aussie’ was undermined by a weaker-than-expected Chinese retail sales release.
New Zealand Dollar Slides in Risk-Off Trade
The New Zealand Dollar (NZD) also weakened in overnight trade as the lacklustre Chinese data and a strong US Dollar dampened the appeal of the risk-sensitive ‘Kiwi’.
Data Releases
13:30 USD Empire State Manufacturing Index (May)