Currency Archives - Page 8 of 27

May 16, 2025 By PARKERYL Currency

Modest weekly uptick for the US dollar – United States

Written by the Market Insights Team

US growth signals mixed

George Vessey – Lead FX & Macro Strategist

Further dampening dollar demand towards the end of the week was a batch of US data misses. April retail sales showed that pre-emptive buying ahead of tariffs faded, following March’s spending surge. Meanwhile, subdued PPI suggests that companies are absorbing higher costs, though this may not be sustainable.

April retail sales growth decelerated, with the value of purchases rising just 0.1%, unadjusted for inflation. Seven out of 13 categories saw declines, signaling broad-based weakness as the prior March spending surge faded. Meanwhile, prices paid to US producers unexpectedly declined in April by the most in five years. PPI components imply a modest 0.1% m/m increase for the core PCE deflator, the Fed’s preferred inflation gauge. Portfolio management fees plunged 6.9% m/m, while medical services softened relative to CPI, reinforcing expectations that the Fed could resume rate cuts later in the year. Yet, sharp revisions to the upside from the previous two PPI prints cloud the outlook.

Elsewhere, manufacturing surveys from the Empire State and Philadelphia Fed signaled worsening business conditions but higher new orders, hinting at slight expansion despite pricing pressures. These surveys point to a potential rise in the ISM manufacturing PMI for May, with higher raw material costs projected in the months ahead.

Dollar’s rebound lacks conviction

George Vessey – Lead FX & Macro Strategist

The S&P 500 has jumped 4% this week, erasing its year-to-date losses as the US-China trade truce brings relief. The 90-day tariff rollback signals an end to the worst phase of the trade war, fuelling risk appetite and driving Treasury yields higher as traders exit safe-haven assets. But the US dollar’s rebound has already lost steam, further hindered by fresh speculation that President Donald Trump favours a weaker buck.

Despite the initial dollar rebound, its gains have proved short-lived. Investors remain wary of lingering trade-related economic damage, and without clear evidence of recovery, the incentive to chase the dollar higher remains weak. This is despite short-end yields rising as traders steadily dial back expectations for Federal Reserve rate cuts this year, with less than 50 basis points of easing now priced in. Long-end Treasuries remain vulnerable too as Washington’s fiscal policy shifts toward tax cuts without deficit reduction, adding upward pressure on yields and downward pressure on the dollar.

Meanwhile, following US-South Korea trade talks, speculation is once again mounting that President Trump favours a weaker dollar, potentially pressuring other governments to allow their currencies to appreciate in trade negotiations. Asian currency weakness against the dollar has long been seen as an advantage for regional exporters, a stance the administration has sought to challenge.

The key takeaway for now is while the short-term dollar relief from trade de-escalation is clear, the longer-term risks remain. Markets will closely watch economic data in the coming weeks to gauge whether the damage from prior tensions starts surfacing. Indeed, in the FX options market, 1-year dollar sentiment is now the most bearish in five years, highlighting persistent uncertainty.

Real estate slowdown, little relief for buyers

Kevin Ford – FX & Macro Strategist

Canada’s housing market remains under pressure, with existing home sales slipping 0.1% in April, according to the Canadian Real Estate Association. Prices are also losing ground according to the MLS benchmark, which declined 1.2% month-over-month, while the national average home price dropped 3.9% compared to last year.

Toronto saw a slight uptick in monthly home sales, rising 1.8%, but sales are still down 21.3% year-over-year, with the average price dipping 4.2%. Vancouver faced a steeper decline, with sales falling 3.3% from March and 23.4% year-over-year, while prices slid another 6.6%.

Housing inventory has climbed to its highest level since the pandemic, as sellers wait for demand to rebound. However, ongoing economic uncertainty and a weakening job market raise the risk of even more listings, potentially putting further downward pressure on prices.

Still, some signs point to a possible turnaround, lower interest rates and improving affordability could provide much-needed support in select markets. At the end of April, Canada had 5.1 months of available inventory, matching the long-term average. A seller’s market typically holds below 3.6 months of supply, while a buyer’s market extends beyond 6.4 months, meaning buyers are awaiting for better conditions while market slowly quiets and uncertainty lingers.

Chart Canada real estate and disposable income

In the FX market, after opening the week at 1.392 and testing key support at 1.389, the Canadian dollar’s upside moves have met resistance near the 200-day SMA at 1.401. This selling pressure was evident again in sharp corrections throughout the week, bringing the pair back to its 1-year average at 1.394. The widening spread between US and Canadian short-term yields has also added pressure on the CAD, which is likely to maintain 1.39 as a key support level in the coming weeks.

Looking ahead, the weekly chart suggests price movements next week could remain contained between the 60-week SMA at 1.392 and the 40-week SMA at 1.403. Also, neutral positioning in the FX options market, reflected in one-month risk reversals, suggests low-volatility and range-bound outlook in the near term. However, if bearish sentiment around the U.S. dollar returns, the CAD may test support levels below 1.389.

Euro consolidates around $1.12

George Vessey – Lead FX & Macro Strategist

Although EUR/USD remains largely at the mercy of US risk sentiment, we had some notable data out of Europe this week, which has arguably helped the pair recover ground back above the $1.12 handle, though still down four weeks in a row and 1% month-to-date.

Eurozone industrial production grew 4.7% in Q1, the strongest outside of the post-lockdown rebound in 2020, boosting 0.4% GDP growth. A key driver was US frontloading of European goods ahead of Trump’s tariffs, particularly in pharmaceuticals, where production rose 23.2% – notably in Ireland, a key hub. However, with Liberation Day tariffs now in effect, demand for Eurozone exports is set to weaken, casting doubt on whether this surge is sustainable. The ECB’s dovish stance combined with trade uncertainty may weigh on sentiment, keeping the euro’s upside in check despite recent strong data.

A cautious recovery trend compared to late 2024 could emerge once uncertainties ease and inventories normalize, but don’t expect first-quarter momentum to hold. That said, the euro’s upside hinges largely on dollar weakness, especially with the growing disconnect between price action and underlying fundamentals. Without negative USD catalysts, sustained euro strength remains questionable, particularly as ECB policy remains dovish and trade uncertainties persist.

Third straight half-point cut from Banxico

Kevin Ford – FX & Macro Strategist

Banco de México’s latest rate cut was widely expected, with a unanimous decision to lower the overnight interest rate by 50 basis points to 8.5%. The move comes as the economy narrowly avoided a recession, expanding just 0.2% in the first quarter, while the central bank halved its 2025 GDP forecast to 0.6%.

Inflation accelerated to 3.93% in April, exceeding the 3% target, but policymakers remain focused on guiding inflation toward their goal within a tolerance range of plus or minus one percentage point. Markets viewed the press release as dovish, pricing in Banxico’s terminal rate at 6.25% by the end of 2025. What caught attention was the revised CPI forecast for the second quarter, lifted to 3.9% from 3.5% in the accompanying statement.

Despite carry erosion as rate cuts unfold, the peso has still gained 6.8% against the dollar this year, driven by broad risk-on sentiment supporting rallies in emerging markets and Latin American assets. The Mexican stock exchange has followed suit, climbing 17% year-to-date, as tracked by the S&P/BMV IPC Index.

Tariffs remain a headwind, with President Sheinbaum’s administration working to ease trade tensions, though lingering uncertainty continues to cloud the outlook.

Banxico’s dovish stance had little immediate effect on the peso, though it has rebounded from its weekly low of 19.3 to its five-year average of 19.5. However, momentum beyond 19.3 could face increasing resistance.

Yields drop, Gold retreats, stocks extend weekly gains

Table: 7-day currency trends and trading ranges

Key global risk events

Calendar: May 12-16

All times are in ET

Have a question? [email protected]

*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quothave a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.

Source link

May 16, 2025 By PARKERYL Currency

Shifting tides: FX, policy and trade – United States

Written by the Market Insights Team

What’s behind dollar softness?

Kevin Ford – FX & Macro Strategist

The last time the S&P 500 erased a 15% year-to-date decline in under six weeks was back in 1982. Yet, while equities recovered, the dollar’s rebound has been underwhelming, its one-month gain holding at a modest 1%. So, what’s keeping the dollar in check despite the market rally? And do current conditions warrant a synchronized move higher?

One factor that could be adding pressure to the US dollar is the recent front-loading from US firms. Businesses paying for imports are driving capital outflows, and while deteriorates the US current account, adds bearish pressure on the greenback as dollars leave the country.

Another key concern is confidence in US debt, which remains shaky. While there’s been policy backtracking, it hasn’t meaningfully improved the perception of US creditworthiness. International investors remain cautious. Over the past five years, increased government spending and a widening fiscal deficit have fueled skepticism around the US credit outlook. This uncertainty, reflected in the US Treasury option-adjusted spread, continues to keep investors on edge.

Also, there’s Stephen Miran’s Mar-a-Lago accord. Miran, who’s part of the US economic cabinet, recommended in his paper in 2024, that the US would put pressure on economic partners to strengthen their currency as part of the negotiations over how countries could avoid stiff tariff rates. This may well be the case with Asian currencies. As we’ve seen since the beginning of May, with Taiwanese dollar and Korean Won, the currencies have largely appreciated against the dollar. After Taiwan said it concluded first ‘substantive’ tariff talks with US, there was a big move in TWD which saw its biggest gains against the US dollar since 1988. And Taiwan’s central bank didn’t intervene, which is odd.

What adds to the counterintuitive recent market dynamics? As investors reassess expectations, not just for fewer rate cuts, but also for a delay in the Fed’s timeline, the global rate divergence should, in theory, make the US dollar more attractive. Major central banks, including the Bank of England and the European Central Bank, are signaling lower rates in 2025, while the Bank of Japan is holding steady at 0.5%. This contrast should reinforce support for Greenback. Yet the dollar momentum has stalled.

While we expected a stronger rebound due to re-allocation of US equities, risk-on mode has behaved traditionally with equities close to short-term overbought conditions and treasuries selling-off throughout the week. The dollar index, extended its retreat on Wednesday, slipping to 100.3 after falling from its one-month high. A softer-than-expected inflation report reinforced expectations that the Fed could still have room for rate cuts this year, adding some pressure on the dollar. Notably, the currency’s decline has been broad-based.

Also, it is important to note a long-term trend. Gold allocations have been steadily rising, and not just in 2025 headlines. Major central banks have been quietly reshaping their foreign reserves for years, shifting away from the dollar. This long-term trend has gained momentum amid shifting global trade dynamics and geopolitical uncertainty, further accelerating the move.

US growth signals mixed

George Vessey – Lead FX & Macro Strategist

Further dampening dollar demand towards the end of the week was a batch of US data misses. April retail sales showed that pre-emptive buying ahead of tariffs faded, following March’s spending surge. Meanwhile, subdued PPI suggests that companies are absorbing higher costs, though this may not be sustainable.

April retail sales growth decelerated, with the value of purchases rising just 0.1%, unadjusted for inflation. Seven out of 13 categories saw declines, signaling broad-based weakness as the prior March spending surge faded. Meanwhile, prices paid to US producers unexpectedly declined in April by the most in five years. PPI components imply a modest 0.1% m/m increase for the core PCE deflator, the Fed’s preferred inflation gauge. Portfolio management fees plunged 6.9% m/m, while medical services softened relative to CPI, reinforcing expectations that the Fed could resume rate cuts later in the year. Yet, sharp revisions to the upside from the previous two PPI prints cloud the outlook.

Elsewhere, manufacturing surveys from the Empire State and Philadelphia Fed signaled worsening business conditions but higher new orders, hinting at slight expansion despite pricing pressures. These surveys point to a potential rise in the ISM manufacturing PMI for May, with higher raw material costs projected in the months ahead.

Euro consolidates around $1.12

George Vessey – Lead FX & Macro Strategist

Although EUR/USD remains largely at the mercy of US risk sentiment, we had some notable data out of Europe this week, which has arguably helped the pair recover ground back above the $1.12 handle, though still down four weeks in a row and 1% month-to-date.

Eurozone industrial production grew 4.7% in Q1, the strongest outside of the post-lockdown rebound in 2020, boosting 0.4% GDP growth. A key driver was US frontloading of European goods ahead of Trump’s tariffs, particularly in pharmaceuticals, where production rose 23.2% – notably in Ireland, a key hub. However, with Liberation Day tariffs now in effect, demand for Eurozone exports is set to weaken, casting doubt on whether this surge is sustainable. The ECB’s dovish stance combined with trade uncertainty may weigh on sentiment, keeping the euro’s upside in check despite recent strong data.

A cautious recovery trend compared to late 2024 could emerge once uncertainties ease and inventories normalize, but don’t expect first-quarter momentum to hold. That said, the euro’s upside hinges largely on dollar weakness, especially with the growing disconnect between price action and underlying fundamentals. Without negative USD catalysts, sustained euro strength remains questionable, particularly as ECB policy remains dovish and trade uncertainties persist.

UK data dump supports pound

George Vessey – Lead FX & Macro Strategist

After falling to a 4-week low earlier in the week, the British pound edged higher after a string of UK data and improving global risk sentiment supported sterling demand. GBP/USD is back above the $1.33 handle, flirting with its 21-day moving average as it attempts to resume its uptrend. GBP/EUR is also hovering near a key moving average around the €1.19 mark, up 0.5% this week, though still down 1.7% year-to-date.

On the data front, UK Q1 GDP growth surprised at 0.7%, well above Q4’s 0.1%. March’s 0.2% expansion reinforced momentum, with exports hitting a two-year high – though this data predates Liberation Day tariffs. Labour market data paints a mixed picture. Wage growth remains strong, up 5.6% y/y, but is plateauing, raising concerns about affordability for businesses. Employment held steady at 75.0%, while unemployment ticked up to 4.5%, suggesting hiring challenges persist. Vacancies fell to 761,000, continuing a downward trend. But the solid GDP print and sticky wages suggest the BoE may delay rate cuts, with traders now eyeing August for policy shifts.

Looking ahead for the pound, bullish GBP sentiment is at a five-year high, with one-month GBP/USD risk reversals climbing. Options pricing reflects growing confidence, while speculation around Trump favouring a weaker dollar has pushed one-year GBP/USD risk reversals to 2009 levels. Further sterling strength stems from UK-EU ties ahead of next week’s summit, expected to unveil economic reforms that could boost growth and influence BoE expectations.

Stocks and yields extend rally

Table: 7-day currency trends and trading ranges

Key global risk events

Calendar: May 12-16

All times are in BST

Have a question? [email protected]

*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.

Source link

May 16, 2025 By PARKERYL Currency

USD/JPY sell-off sees USD weaker in Asia

Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist

USD slips in Asia, led by USD/JPY

The USD/JPY saw further big losses overnight with the pair down for the fourth-consecutive session.

The USD’s move lower came after a weaker-than-expected producer prices report that followed Tuesday’s softer consumer inflation number.

The USD was weaker across Asia with USD/SGD down 0.4% while USD/CNH fell 0.2%.

On the other hand, the Aussie and kiwi both slipped, with the AUD/USD and NZD/USD both down 0.4%.

Job, wage acceleration make RBA cut less certain

Yesterday’s stronger than expected Australian jobs number saw the April jobs report at 89k new jobs, well above the 21k forecast, with the March number also revised higher, to 36k.

Additionally, Wednesday’s March-quarter wage price index rose 0.9% on the quarter, exceeding expectations of 0.8%, with annual wage growth climbing to 3.4%.

This jobs growth and wage acceleration could influence the RBA’s upcoming rate decision – making a rate cut less certain when the RBA meets on Tuesday.

On the technical front, AUD/USD is now hovering near a flattening 21-day EMA of 0.6399, with increasing downward momentum as seen in a negative reading from the MACD.

UK-US trade deal stirs Chinese concerns

China has expressed concerns that the UK-US trade arrangement could potentially force Chinese businesses out of UK supply chains.

Beijing criticized bilateral trade arrangements that target other countries, placing London in a difficult position between competing economic powers.

USD/CNH has bounced off its key psychological support handle of 7.2000, now hovering near the low end of its 30-day trading range.

USD buyers may look to take advantage now, given our forecast for USD/CNH to trend higher over time.

The 21-day EMA of 7.2439 serves as the next key resistance for the pair.

USD lower in Asia

Table: seven-day rolling currency trends and trading ranges

Key global risk events

Calendar: 12 – 17 May

Have a question? [email protected]

*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.

Source link

May 15, 2025 By PARKERYL Currency

US Dollar eases gains. Banxico to cut rates – United States

Written by the Market Insights Team

Kevin Ford – FX & Macro Strategist

What’s behind dollar softness?

The last time the S&P 500 erased a 15% year-to-date decline in under six weeks was back in 1982. Yet, while equities recovered, the dollar’s rebound has been underwhelming, its one-month gain holding at a modest 1%. So, what’s keeping the dollar in check despite the market rally? And do current conditions warrant a synchronized move higher?

One factor that could have added pressure to the US dollar is the recent front-loading from US firms. Businesses paying for imports have been driving capital outflows, and while deteriorates the US current account, adds bearish pressure on the greenback as dollars leave the country.

Another key concern is confidence in US debt, which remains shaky. While there’s been policy backtracking, it hasn’t meaningfully improved the perception of US creditworthiness. International investors remain cautious. Over the past five years, increased government spending and a widening fiscal deficit have fueled skepticism around the US credit outlook. This uncertainty, reflected in the US Treasury option-adjusted spread, continues to keep investors on edge.

To add to the recent shattered confidence, US Treasury yields are rising again, reaching levels that previously triggered heightened volatility. Are bond vigilantes making a comeback? Fixed income markets seem uneasy about the upcoming bills, and a sell-off in Treasuries is also contributing to the retreat in the US dollar.

Also, there’s Stephen Miran’s Mar-a-Lago accord. Miran, who’s part of the US economic cabinet, recommended in his paper in 2024, that the US would put pressure on economic partners to strengthen their currency as part of the negotiations over how countries could avoid stiff tariff rates. This may well be the case with Asian currencies. As we’ve seen since the beginning of May, with Taiwanese dollar and Korean Won, the currencies have largely appreciated against the dollar. After Taiwan said it concluded first ‘substantive’ tariff talks with US, there was a big move in TWD which saw its biggest gains against the US dollar since 1988. And Taiwan’s central bank didn’t intervene, which is odd.

What adds to the counterintuitive recent market dynamics? As investors reassess expectations, not just for fewer rate cuts, but also for a delay in the Fed’s timeline, the global rate divergence should, in theory, make the US dollar more attractive. Major central banks, including the Bank of England and the European Central Bank, are signaling lower rates in 2025, while the Bank of Japan is holding steady at 0.5%. This contrast should reinforce support for Greenback. Yet the dollar momentum has stalled.

While we expected a stronger rebound due to the re-allocation of US equities, risk-on mode has followed a familiar pattern, equities nearing short-term overbought conditions, Treasuries selling off throughout the week, and the VIX remaining well below 20. The dollar index extended its retreat on Wednesday, slipping to 100.3 after falling from its one-month high. A softer-than-expected inflation report reinforced expectations that the Fed could still have room for rate cuts this year, applying additional pressure on the dollar. Notably, the currency’s decline has been broad-based, reflecting a shift in sentiment. Another factor behind the muted enthusiasm for the dollar amid the recent equities rebound is its composition, driven primarily by retail flows, while institutional investors and hedge funds have lagged in repositioning long US assets.

Finally, it is important to note a long-term trend. Gold allocations have been steadily rising, and not just in 2025 headlines. Major central banks have been quietly reshaping their foreign reserves for years, shifting away from the dollar. This long-term trend has gained momentum amid shifting global trade dynamics and geopolitical uncertainty, further accelerating the move.

External forces keep euro in check

George Vessey – Lead FX & Macro Strategist

Euro price action remains driven by external factors in the short term. The common currency reclaimed $1.12 yesterday, buoyed by a weaker dollar following an unexpected drop in US inflation and caution over US-China trade talks, despite a 90-day tariff truce. However, EUR/USD remains about four cents from its 2025 peak and a retest of fresh highs isn’t on the cards unless the pair closes back above its 21-day moving average at $1.1314.

In Eurozone macro news, the ZEW expectations survey rebounded in May, signalling growing optimism around economic stability, government formation, and trade progress. However, the current situation gauge failed to show any recovery, highlighting ongoing economic uncertainty. Today’s industrial production data will be a key focus, offering insight into whether momentum is building or if fragile conditions persist. Investors will watch closely for confirmation of stabilization or signs that growth risks remain elevated.

On the monetary policy front, markets have revised ECB rate expectations, now pricing the deposit facility rate at 1.71% by year-end, up from 1.67% on Friday but below April’s 1.55% levels. At the same time, traders almost fully expect a June rate cut, with odds at 85%, as policymakers seek to counter US tariff pressures on growth. ECB officials have weighed in on policy direction, François Villeroy de Galhau signaled room for another cut by summer, while Joachim Nagel struck an optimistic tone, citing a good probability that inflation will approach the 2% target.

Beyond short-term price fluctuations, the upside bias on the euro longer term remains intact. Call options on the euro versus the dollar are near their most expensive levels in nearly five years, signaling heightened demand for upside exposure. This aligns with positive non-commercial futures positioning, reinforcing a broader bullish bias in the currency. Fund managers see this as more than just a tactical trade, suggesting that the euro’s upward trajectory stems from a structural shift rather than short-term volatility.

Banxico to cut rates

Kevin Ford – FX & Macro Strategist

The Mexican peso has strengthened to 19.3 per dollar, reaching a seven-month high as a sharp pullback in the USD fuels its rebound. Latin American currencies are leading the charge, outperforming their emerging-market peers as risk-on sentiment dominates. Meanwhile, the Banco de México (Banxico) is expected to cut rates by 50 bps today.

Mexican economy growth momentum remains weak, with April’s CPI confirming that inflationary pressures in the first half of the month were temporary. We’ll be on the lookout for potential revisions to CPI and core CPI forecasts as well as growth forecasts.

Broader uncertainty and subdued business sentiment continue to weigh on the outlook, largely due to lingering questions about US trade policy and the future of CUSMA/USMCA. As the cycle unfolds, markets are likely to price the terminal rate closer to 6%.

Strong resistance at 200-day SMA

Kevin Ford – FX & Macro Strategist

While the full extent of economic damage from tariffs remains unclear, and dovish pressure on the Fed is unlikely to fade entirely, sentiment on the US dollar should keep the Loonie trading above 1.39. Meanwhile, FX options market positioning has turned neutral toward the Canadian dollar.

As previously noted, upside moves during this week have faced selling pressure near the 200-day SMA, at 1.401, evidenced again by this week’s sharp drop in USD/CAD from 1.401 to 1.395.

Further supporting a shift in sentiment, Carney’s new cabinet has reaffirmed its commitment to redirecting Canada’s economic focus away from the U.S., pledging billions toward growth initiatives. Priorities include the removal of trade barriers across the 10 provinces and targeted tax cuts to jumpstart economic revitalization. Markets have responded swiftly, with the announcement coinciding with USD/CAD’s recent decline, underscoring growing optimism for the Loonie as major fiscal spending aims to reinvigorate a struggling economy.

US Dollar eases gains, Mexican Peso hits 7-month high

Table: 7-day currency trends and trading ranges

Key global risk events

Calendar: May 12-16

All times are in ET

Have a question? [email protected]

*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quothave a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.

Source link

May 15, 2025 By PARKERYL Currency

Speculation swells over desire for weaker dollar – United States

Written by the Market Insights Team

Dollar’s rebound lacks conviction, retail sales eyed

George Vessey – Lead FX & Macro Strategist

The S&P 500 has jumped 4% this week, erasing its year-to-date losses as the US-China trade truce brings relief. The 90-day tariff rollback signals an end to the worst phase of the trade war, fuelling risk appetite and driving Treasury yields higher as traders exit safe-haven assets. But the US dollar’s rebound has already lost steam, further hindered by fresh speculation that President Donald Trump favours a weaker buck.

Despite the initial dollar rebound, its gains have proved short-lived. Investors remain wary of lingering trade-related economic damage, and without clear evidence of recovery, the incentive to chase the dollar higher remains weak. This is despite short-end yields rising as traders steadily dial back expectations for Federal Reserve rate cuts this year, with less than 50 basis points of easing now priced in. Long-end Treasuries remain vulnerable too as Washington’s fiscal policy shifts toward tax cuts without deficit reduction, adding upward pressure on yields and downward pressure on the dollar.

Meanwhile, following US-South Korea trade talks, speculation is once again mounting that President Trump favours a weaker dollar, potentially pressuring other governments to allow their currencies to appreciate in trade negotiations. Asian currency weakness against the dollar has long been seen as an advantage for regional exporters, a stance the administration has sought to challenge.

The key takeaway for now is while the short-term dollar relief from trade de-escalation is clear, the longer-term risks remain. Markets will closely watch economic data in the coming weeks to gauge whether the damage from prior tensions starts surfacing. Indeed, in the FX options market, 1-year dollar sentiment is now the most bearish in five years, highlighting persistent uncertainty. As investors look ahead, US retail sales data today may provide fresh signals for the medium-term trajectory of the dollar and broader markets.

External forces keep euro in check

George Vessey – Lead FX & Macro Strategist

Euro price action remains driven by external factors in the short term. The common currency reclaimed $1.12 yesterday, buoyed by a weaker dollar following an unexpected drop in US inflation and caution over US-China trade talks, despite a 90-day tariff truce. However, EUR/USD remains about four cents from its 2025 peak and a retest of fresh highs isn’t on the cards unless the pair closes back above its 21-day moving average at $1.1314.

In Eurozone macro news, the ZEW expectations survey rebounded in May, signalling growing optimism around economic stability, government formation, and trade progress. However, the current situation gauge failed to show any recovery, highlighting ongoing economic uncertainty. Today’s industrial production data will be a key focus, offering insight into whether momentum is building or if fragile conditions persist. Investors will watch closely for confirmation of stabilization or signs that growth risks remain elevated.

On the monetary policy front, markets have revised ECB rate expectations, now pricing the deposit facility rate at 1.71% by year-end, up from 1.67% on Friday but below April’s 1.55% levels. At the same time, traders almost fully expect a June rate cut, with odds at 85%, as policymakers seek to counter US tariff pressures on growth. ECB officials have weighed in on policy direction, François Villeroy de Galhau signaled room for another cut by summer, while Joachim Nagel struck an optimistic tone, citing a good probability that inflation will approach the 2% target.

Beyond short-term price fluctuations, the upside bias on euro longer term remains intact. Call options on the euro versus the dollar are near their most expensive levels in nearly five years, signaling heightened demand for upside exposure. This aligns with positive non-commercial futures positioning, reinforcing a broader bullish bias in the currency. Fund managers see this as more than just a tactical trade, suggesting that the euro’s upward trajectory stems from a structural shift rather than short-term volatility.

UK GDP beat; sterling pound sentiment

George Vessey – Lead FX & Macro Strategist

The British pound edged higher after UK GDP data showed stronger-than-expected growth in the first quarter. The economy expanded 0.7%, surpassing forecasts of 0.6% and well above the 0.1% increase in Q4 2024. March’s 0.2% growth, beating flat expectations, highlights momentum, with exports reaching their best levels in over two years—though the data was compiled before “Liberation Day” tariffs.

Alongside sticky wage growth seen in the labour report this week, the solid GDP print suggests the Bank of England (BoE) may hold off on rate cuts in June, a stance already reflected in market pricing. However, current indications point to an August policy move, keeping traders focused on evolving BoE guidance.

Traders have reinforced bullish positions on the British pound, pushing sentiment to its strongest level in over five years, according to options pricing data. One-month GBP/USD risk reversals climbed for the third time in four days, further in favour of calls. Simply put, the premium on call options – which bet on a higher sterling – continues to widen, reflecting growing confidence in the pound’s upside potential. Equally, the repricing of sterling’s volatility skew extends as speculation mounts that President Trump favors a weaker dollar. This is reflected by one-year GBP/USD risk reversals, rising to a level not seen since 2009, suggesting traders are recalibrating long-term positioning.

Further supporting this more optimistic shift in GBP sentiment some idiosyncratic sterling strength driven by the notion of strengthening UK-EU ties ahead of a summit next week. It is expected to help unpack a wide-ranging package of economic reforms to boost the UK economy, which may in turn prompt some more hawkish repricing of BoE expectations.

Dollar erases gains whilst British pound shines

Table: 7-day currency trends and trading ranges

Key global risk events

Calendar: May 12-16

All times are in BST

Have a question? [email protected]

*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.

Source link

May 14, 2025 By PARKERYL Currency

Aussie, kiwi gains short-lived ahead of US retail sales – United States

Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist

USD stronger across APAC ahead of US retail sales

The Australian and New Zealand dollars – recently higher – turned sharply lower overnight ahead of US retail sales numbers due tonight.

Last month, the US retail sales result was reported at 1.4% for March – the strongest result since January 2023 – as consumers tried to purchase products ahead of the announcement of new US tariffs. Economists are looking at a flat result for the April report.

The US dollar recovered from early losses yesterday to end positive on the day ahead of these key retail sales numbers. The Aussie and kiwi were the hardest hit overnight.

The AUD/USD fell 0.7% with the AUD lower in most other markets. The AUD/EUR fell 0.5% as it dropped from one-month highs while AUD/JPY lost 1.1% as it turned from two-month highs,

The NZD/USD lost 0.6% with NZD/EUR also down 0.5% and the NZD/JPY similarly dropping 1.1% and falling from more than three-month highs

The USD was higher in Asia with the USD/SGD up 0.1% while the USD/CNH was up 0.2% from six-month lows.

Aussie weaker ahead of local jobs

Looking to today’s trade, the early focus will be on Australian jobs at 11.30am AEST.

We anticipate a 20k increase in employment, while the unemployment rate is likely to remain at 4.1%, in the April labour force data.

Monthly job growth has been trending downward, which is in line with lead indications such as vacancy statistics.

From technical lens, the AUD/USD has moved into a consolidation phase, trading between 0.6350 and 0.6520 with around 8% gains from the recent 8 April lows of 0.5915.

The next key support lies at its 50-day EMA of 0.6346.

BoJ’s Uchida expresses concern over US tariff effects; JPY gains

Bank of Japan Deputy Governor Uchida has expressed concern that US tariffs will negatively impact Japan’s economic growth.

He forecasts that the Japanese economy will likely slow to trend growth this year before regaining momentum next year as global economic conditions improve.

Uchida noted that core inflation in Japan may plateau temporarily.

Despite this, he remains optimistic about continued wage growth due to tight labour market conditions.

Regarding FX, the Deputy Governor appeared cautious about yen appreciation, highlighting that a stronger yen tends to harm exports and reduce profits for major manufacturing companies.

USD/JPY has bounced off from its key psychological support of 140. The next key resistance level 149.73 of the 200-day EMA is in plain sight.

Aussie, kiwi turn from highs

Table: seven-day rolling currency trends and trading ranges

Key global risk events

Calendar: 12 – 17 May

All times AEST

Have a question? [email protected]

*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.

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May 14, 2025 By PARKERYL Currency

US Dollar slips as stocks climb on soft US inflation – United States

Written by the Market Insights Team

Inflation softens with no tariff bite yet

George Vessey – Lead FX & Macro Strategist

The US dollar index hovered around 100.9 on Wednesday, after falling nearly 1% in the previous session, whilst US stocks have wiped out their losses so far this year, following Tuesday’s lower than expected US inflation figures.

April’s US consumer prices index rose just 0.2% m/m, undershooting expectations and bringing headline inflation down to 2.3% y/y, its lowest since February 2021. Core inflation remains at 2.8% y/y, and supercore came in at the lowest in about four years. Overall price pressures appear to be easing with little urgency so far by companies to pass along the cost of higher tariffs to consumers.

With the US inflation basket dominated by services, the impact of tariffs on goods, just 19.4% of the index, may stay limited for now, especially amid waning price pressures in housing and services. The NFIB small business survey reinforced this, showing a decline in firms raising prices, adding to the case for softer inflation trends. Although it may still be premature to see the impact from tariffs, it opens the door for earlier-than-expected cuts from the Fed.

The US dollar’s reversal from its 50-week moving average resistance level suggests the currency’s rebound is losing steam. But the rise in US yields suggests investors are looking past short-term inflation relief, awaiting more clarity on tariff pass-through effects in upcoming May and June data. The Fed’s wait-and-see approach has somewhat supported the dollar via the yield channel, but if core data weaken, relative yield support could shift, triggering further dollar downside risks.

Looking ahead, investors are focused on upcoming retail sales and producer inflation data later this week for further signals on the health of the US economy.

Strong resistance at 200-day SMA

Kevin Ford – FX & Macro Strategist

Speaking of epic comebacks, the TSX Index, Canada’s most representative equity benchmark, has surged 15% following the 90-day pause on reciprocal tariffs. This rally has been fueled by broad-based sector strength. Higher gold prices and a rebound in oil prices have further supported momentum, reinforcing the index’s risk-on stance. While recession fears persist for the Canadian economy, the TSX is soaring on renewed optimism on US trade policy and economic recovery.

While the full extent of economic damage from tariffs remains unclear, and dovish pressure on the Fed is unlikely to fade entirely, sentiment on the US dollar should keep the Loonie trading above 1.39. Meanwhile, FX options market positioning has turned neutral toward the Canadian dollar.

As previously noted, upside moves during this week have faced selling pressure near the 200-day SMA, at 1.401, evidenced again by yesterday’s sharp drop in USD/CAD from 1.401 to 1.395.

Further supporting a shift in sentiment, Carney’s new cabinet has reaffirmed its commitment to redirecting Canada’s economic focus away from the U.S., pledging billions toward growth initiatives. Priorities include the removal of trade barriers across the 10 provinces and targeted tax cuts to jumpstart economic revitalization. Markets have responded swiftly, with the announcement coinciding with USD/CAD’s recent decline, underscoring growing optimism for the Loonie as major fiscal spending aims to reinvigorate a struggling economy.

Euro rebounds as sentiment brightens

George Vessey – Lead FX & Macro Strategist

The euro is holding firm just below the $1.12 handle, rebounding from Monday’s 1.5% drop as investors assessed stronger-than-expected German economic sentiment and a surprise dip in US inflation.

Germany’s ZEW Economic Sentiment Index surged to 25.2 in May, from -14 the previous month and far exceeding forecasts of 11.3, signalling growing optimism around economic stability, government formation, and trade progress. In May, almost 30% of surveyed analysts expected an improvement in economic activity amid some progress in tariff disputes and stabilizing inflation. The European Union remains in discussions with the Trump administration to negotiate a resolution on tariffs, yet it has prepared counter-levies on €95 billion worth of US exports should talks fail.

EUR/USD found support at its 50-day moving average, with its 14-day relative strength index hovering around neutral levels near 50, suggesting waning downside momentum. Strengthening expectations for European economic growth and contained inflation risks may encourage international capital flows into European equities, particularly as US positioning remains light.

This backdrop presents a tactical opportunity for a shift toward European assets, increasing the likelihood of relative outperformance in European markets, should growth surprise to the upside. Such trends could continue to support euro demand over the long term as sentiment improves.

Mexican Peso hits 7-month high as dollar retreats

Table: 7-day currency trends and trading ranges

Key global risk events

Calendar: May 12-16

All times are in ET

Have a question? [email protected]

*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quothave a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.

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May 14, 2025 By PARKERYL Currency

US dollar loses steam after inflation undershoot – United States

Written by the Market Insights Team

Inflation softens with no tariff bite yet

George Vessey – Lead FX & Macro Strategist

The US dollar index hovered around 100.9 on Wednesday, after falling nearly 1% in the previous session, whilst US stocks have wiped out their losses so far this year, following Tuesday’s lower than expected US inflation figures.

April’s US consumer prices index rose just 0.2% m/m, undershooting expectations and bringing headline inflation down to 2.3% y/y, its lowest since February 2021. Core inflation remains at 2.8% y/y, and supercore came in at the lowest in about four years. Overall price pressures appear to be easing with little urgency so far by companies to pass along the cost of higher tariffs to consumers.

With the US inflation basket dominated by services, the impact of tariffs on goods, just 19.4% of the index, may stay limited for now, especially amid waning price pressures in housing and services. The NFIB small business survey reinforced this, showing a decline in firms raising prices, adding to the case for softer inflation trends. Although it may still be premature to see the impact from tariffs, it opens the door for earlier-than-expected cuts from the Fed.

The US dollar’s reversal from its 50-week moving average resistance level suggest the currency’s rebound is losing steam. But the rise in US yields suggests investors are looking past short-term inflation relief, awaiting more clarity on tariff pass-through effects in upcoming May and June data. The Fed’s wait-and-see approach has somewhat supported the dollar via the yield channel, but if core data weaken, relative yield support could shift, triggering further dollar downside risks.

Looking ahead, investors are focused on upcoming retail sales and producer inflation data later this week for further signals on the health of the US economy.

Euro rebounds as sentiment brightens

George Vessey – Lead FX & Macro Strategist

The euro is holding firm just below the $1.12 handle, rebounding from Monday’s 1.5% drop as investors assessed stronger-than-expected German economic sentiment and a surprise dip in US inflation.

Germany’s ZEW Economic Sentiment Index surged to 25.2 in May, from -14 the previous month and far exceeding forecasts of 11.3, signalling growing optimism around economic stability, government formation, and trade progress. In May, almost 30% of surveyed analysts expected an improvement in economic activity amid some progress in tariff disputes and stabilizing inflation. The European Union remains in discussions with the Trump administration to negotiate a resolution on tariffs, yet it has prepared counter-levies on €95 billion worth of US exports should talks fail.

EUR/USD found support at its 50-day moving average, with its 14-day relative strength index hovering around neutral levels near 50, suggesting waning downside momentum. Strengthening expectations for European economic growth and contained inflation risks may encourage international capital flows into European equities, particularly as US positioning remains light.

This backdrop presents a tactical opportunity for a shift toward European assets, increasing the likelihood of relative outperformance in European markets, should growth surprise to the upside. Such trends could continue to support euro demand over the long term as sentiment improves.

Pound holds onto 6% gains versus dollar this year

George Vessey – Lead FX & Macro Strategist

The British pound recovered from Monday’s sharp decline, bouncing from below $1.32 to above $1.33 after softer-than-expected US CPI dented dollar demand. GBP/USD is now attempting to reclaim its 21-day moving average, reinforcing prospects for a continued uptrend from January’s $1.21 low. One key catalyst to help drive the pair expand on its more than 6% gains year-to-date would be an extended batch of US economic data misses.

Meanwhile, GBP/EUR gained further traction, briefly changing hand with the €1.19 handle amidst fading market volatility and improved global risk appetite helping the risk-sensitive pound more than the euro. If risk appetite remains elevated, the pound’s high-beta status could fuel an extension above €1.19, but several key moving averages need to be hurdled, such as the 200-day at €1.1925, to strengthen our conviction of a move back towards €1.20.

While UK economic growth remains fragile, recession risks are easing, and the Bank of England has kept a cautious but measured stance, avoiding an aggressive dovish shift. If FX markets refocus on yields, the sterling-euro yield differential remains a bullish factor, supporting the pound’s relative strength. Equally, tariff management advantages, validated by last week’s US-UK trade deal, should continue to bolster GBP sentiment as well.

Stocks extend rebound to 4.5% in a week

Table: 7-day currency trends and trading ranges

Key global risk events

Calendar: May 12-16

All times are in BST

Have a question? [email protected]

*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.

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May 14, 2025 By PARKERYL Currency

Aussie back near highs as US inflation cools – United States

Written by Steven Dooley, Head of Market Insights, and Shier Lee Lim, Lead FX and Macro Strategist

Aussie jumps after US inflation falls

The Australian dollar was one of the best performers overnight with the AUD/USD up 1.6% after a lower-than-expected inflation number caused the US dollar to fall.

The rebound saw the AUD/USD less than 1.0% away from five-month highs.

US annual headline inflation fell from 2.4% in March to 2.3% in April while the core reading was steady at 2.8%.

The NZD/USD also gained strongly with NZD/USD up 1.6%.

Chinese yuan stronger as trade tensions cool

In other market, the cooling from trade tensions was the key driver after the US reduced import duties to 30%, which includes 20% fentanyl duties and 10% universal duties.

Other universal tariffs have not changed, such as the 25% on steel and aluminum and the 25% on automobiles and car components.

To facilitate more discussions, 24% reciprocal tariffs will be halted for 90 days.

The weighted average duty on all imports is reduced from 24% to 15%, while the weighted average tariff on imports from China is reduced from 100% to 35%.

Conversely, China suspends a further 24% of reciprocal duties for 90 days and reduces them to 10% on US imports.

China, meanwhile, stated that it will take the required actions to halt or revoke non-tariff countermeasures against the United States.

The USD/CNH is now more than 3% away from this year’s peak of 7.4290.

The USD/CNH has fallen back to six-month lows, but with the pair still in a long-term uptrend, the path of least resistance is higher in the medium term.

Fed Gooslbee still worried about stagflation

Ahead of last night’s inflation reading, Chicago Federal Reserve President Goolsbee told The New York Times that he believes the tariffs will continue to cause stagflation and that the deal’s short-term character may harm the economy.

Goolsbee continues to believe that the Fed should wait and watch.

Looking at APAC FX, the USD/SGD has edged back up as we’ve been highlighting the potential strength earlier.

The next key resistance levels for the pair is 21-day EMA of 1.3077 and 50-day EMA of 1.3199 next.

USD lower after CPI

Table: seven-day rolling currency trends and trading ranges

Key global risk events

Calendar: 12 – 17 May

All times AEST

Have a question? [email protected]

*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.

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May 13, 2025 By PARKERYL Currency

Solid risk-on session on trade truce – United States

Written by the Market Insights Team

Tariff reset rally

Kevin Ford – FX & Macro Strategist

Just a few months ago, a 30% tariff rate on China would have seemed extreme. Now, those levels are fueling one of the biggest equity market rallies in recent history, with the S&P posting its strongest 22-day surge since 2020. Before COVID, a rally of this magnitude had only occurred during the global financial crisis and the dot-com bubble. Sentiment has shifted, and investors are responding with renewed optimism as the US and China roll back tariffs. The US dollar is also making a comeback, up almost 4% from its 2-year low printed last month.

The US-China tariff deal includes a 115%-point reduction in tariffs, lowering US tariffs on Chinese imports from 145% to 30% and Chinese tariffs on US imports from 125% to 10%. China will suspend or remove non-tariff countermeasures imposed since April 2, 2025, such as export restrictions on critical minerals, though the agreement does not explicitly mention rare earth elements or sanctions on US defense and tech companies. Meanwhile, the US will maintain all pre-April 2 tariffs, including those related to intellectual property, steel, aluminum, and fentanyl trade. The de minimis exemption, which allowed duty-free entry for small parcels, remains terminated, meaning low-value packages under $800 from China and Hong Kong will still face tariffs. Additionally, Chinese electric vehicles, steel, and aluminum remain subject to existing tariffs, along with certain pre-April 2 non-tariff measures, though blacklisting US companies was not explicitly confirmed in the final agreement. While this deal marks a major step in trade de-escalation, key areas of uncertainty remain, and further negotiations could determine whether these tariff adjustments become permanent.

Over the past month, while the Nasdaq is up 11%, the S&P 8%, the US dollar index remains 6% lower year-to-date. Clearly, markets don’t need the greenback to recover, for now. But for the dollar to rally further, it will require stronger international demand. Confidence remains fragile amid these shifting trade dynamics, contributing to the disconnect in market reactions.

As mentioned last week, the worst appears to be behind us. Trump blinked, and the US administration has stepped back. Could they have set a 10% base tariff from the start instead of the extreme levels seen on Liberation Day to avoid this turbulence? Perhaps. The challenge now is managing the uncertainty of this 90-day window. We’ve already seen aggressive front-running over the past two months, which could distort data further, something the Fed, already cautious, will need to navigate carefully.

Euro down almost 5% from recent peaks

George Vessey – Lead FX & Macro Strategist

The euro continues to extend losses as trade de-escalation fuels a reversal in the “sell America” trade, boosting US equities while oil prices surge. The inverse correlation between the euro and US stocks and crude remains strong, with fading volatility adding to downside pressure on the common currency, which is now almost 5% down from recent peaks.

Crude’s rally of late, driven by signs that the global trade fallout may be less severe than feared, is lifting commodity prices. As a net importer of oil, Europe faces higher energy costs, weighing further on the euro if the rally continues. EUR/USD dropped 1.4% on Monday, marking its biggest daily decline since the post-US election slump, as it battles to hold above the $1.11 handle. A short-term move toward $1.10 is possible, especially if the pair closes below its 50-day moving average at $1.1084. Today’s German ZEW surveys will be closely monitored to assess whether the euro’s slide extends further or stabilizes near current levels.

Market focus may now shift back to yield differentials too. The Fed’s cautious stance favours dollar bulls, contrasting with expectations of more ECB rate cuts ahead, meaning EUR/USD may fall further in line with euro-US yield spreads. That said, US core data remains uncertain and any cyclical softening could trigger fresh dollar depreciation, particularly if Fed rate expectations adjust dovishly.

Loonie weakens on changing mood

Kevin Ford – FX & Macro Strategist

President Trump made it clear that no country would get the same treatment as the UK. This doesn’t bode well for Canada, as broad-based tariffs persist, keeping the outlook for the Canadian economy uncertain and under pressure. What we’re now seeing played out in trade deals, with both the US-UK and US-China agreements, is that baseline tariffs between 10% and 30% are now a mainstay.

USD/CAD extended last week’s rebound, briefly pausing at 1.394 before resuming its climb, driven by renewed trade optimism as the U.S. and China agreed to slash tariffs by 115% for 90 days. Some resistance is expected near 1.401, where the 200-day SMA sits. Meanwhile, widening US-Canada yield spreads and shifting Fed expectations suggest the Canadian dollar will likely stay above 1.39 in the short term. Broader US dollar strength against the Euro, Pound, and Yen should continue to support USD/CAD’s upward momentum in the coming sessions.

Looking ahead, U.S.-Japan trade negotiations remain stuck, as Japan refuses to accept any deal that lacks sector-specific exemptions. In South Korea, the prospect of a trade agreement before the country’s presidential election on June 3 has been completely abandoned. Meanwhile in the Eurozone, officials are assembling a package of retaliatory tariffs targeting $100 billion worth of U.S. industrial goods. So, this may be as good as trade policy gets, at least for now.

Sterling outpaces euro, but dollar dominates

George Vessey – Lead FX & Macro Strategist

The pound suffered its biggest daily decline in a month on Monday as the US dollar came out on top after the positive US-China trade developments. GBP/USD is grappling with the $1.32 handle today, over two cents from its 2025 peak, but still circa 3% above its 5-year average. A drop towards the 50-day moving average at $1.3091 looks feasible in the short term, but FX traders are still optimistic about the pound’s outlook over a longer time horizon.

Meanwhile, the positive GBP/EUR bias gained momentum following the tariff news, with three key drivers supporting further sterling upside. First, while the UK economic outlook isn’t particularly bullish, recession risks are easing, and the BoE remains cautious without ramping up its dovish stance. Second, as FX markets shift focus back to yields, the sterling-euro yield differential remains firmly bullish, reinforcing the currency’s relative strength. Third, the UK’s advantage in tariff management – a core bullish factor identified earlier this year – was validated by last week’s US-UK trade deal, further bolstering sentiment. One missing piece in the GBP/EUR rally has been risk appetite, but with market optimism returning, sterling’s high-beta status could help extend the pair beyond €1.19, should momentum persist.

On the data front, this morning’s UK labour market report revealed the unemployment rate edged higher to 4.5% as expected – its highest level since 2021. Moreover, the number of workers on payrolls dropped 33,000 in the wake of a sharp increase in employment costs announced in the October budget and the clouded global economic outlook. Separate figures showed wage growth slowing — another sign of a cooling labor market. Private-sector wage growth, the gauge most closely watched by the BoE to gauge underlying pay excluding bonuses, slowed to 5.6% from 5.9%. It was lower than the consensus forecast but above the 3% consistent with keeping inflation sustainably at the 2% target, which is why the BoE maintains a cautious approach to policy easing.

Dollar index climbs over 2% in a week

Table: 7-day currency trends and trading ranges

Key global risk events

Calendar: May 12-16

All times are in ET

Have a question? [email protected]

*The FX rates published are provided by Convera’s Market Insights team for research purposes only. The rates have a unique source and may not align to any live exchange rates quothave a unique source and may not align to any live exchange rates quoted on other sites. They are not an indication of actual buy/sell rates, or a financial offer.

Source link

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