Currency Market Analysis

May 06, 2021 | Currency Market Analysis

Global Themes

The Euro has defended support at 1.2000 for the past two-weeks. The single currency is higher by 50-cents this morning helped by stronger data. Eurozone Retail Sales for March grew +2.7%, more than the +1.5% expected, and on top of a very strong +4.2% in Feb. German Factory Orders rose 3.0%, more than the +1.7% expected, year/year orders rose a whopping 29.5%. Industrial Production for March in the Eurozone will be reported Friday. Stronger growth and an improving vaccination effort are helping turn investors view in a positive direction towards the Euro. 

USD

Canadian dollar hit its highest level since September 2017 aided by strength in commodities prices and a lower US dollar overall. The CRB Commodity Price Index has surged 11% since the beginning of April. Friday, Canada reports its April jobs figures that are expected to show significant declines in job creation due to the 3rd Covid wave that hit Canada last month.

GBP

The British Pound is slightly higher vs the US dollar after testing 2.5-month trend-line resistance at 1.3950 earlier.  IHS/Markit Service Sector and Composite numbers for April rose to 7.5-year highs of 61.0 vs 56.3 and 60.7 vs 56.4 in March, and indicate the British economy growing at a healthy clip. The Bank of England voted 9-0 to keep its policy rate unchanged at 0.1%. The bank sharply increased its growth estimate for the British economy to +7.25% GDP in 2021. The bank also said they would slow their bond-buying program from 4.4 Billion pounds to 3.4 Billion pounds a week between May and August

CAD

Canadian dollar hit its highest level since September 2017 aided by strength in commodities prices and a lower US dollar overall. The CRB Commodity Price Index has surged 11% since the beginning of April. Friday, Canada reports its April jobs figures that are expected to show significant declines in job creation due to the 3rd Covid wave that hit Canada last month.


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