GBP/USD turns at key 1.3400 level
The GBP/USD was higher last week but the sharp turn seen at the major technical level of 1.3400 means markets will be closely watching for any signs of weakness.
Tariff news took a back seat last week with markets instead focused on the renewed tension between US president Donald Trump and Federal Reserve chair Jerome Powell. Initially, worries that Trump was looking for ways to end Powell’s term saw the USD tumble, but a cooling of concerns saw the USD recover.
Technically, some momentum studies, like the relative strength index (RSI), have also suggested the GBP/USD could reverse.
Away from tariff news, key elections remain in focus this week. Notably, the Canadian national election, to be held on Monday, is expected to see a win for Mark Carney’s Liberal Party. Australia and Singapore both vote in national elections on Saturday.
ECB’s Kazaks warns against rate cuts
According to Bloomberg, Martins Kazaks, a member of the Governing Council, stated that the ECB should only cut rates to an “accommodation” level if the economic outlook significantly worsens.
Kazaks stated over the weekend in Washington, where he attended the IMF’s spring meetings, that while US tariff policies may slow down inflation and even trigger a recession, there is little indication of what will happen next and reducing too much would waste policy space.
“The question is more about whether we will have to go much lower below 2.00%, but we are at 2.25%,” he stated. “If it’s necessary, we’ll do it, but in order to do so and further reduce inflation, the state of the economy would need to deteriorate.”
EUR/USD has recently corrected from short-term highs. From here, the 21-day EMA support of 1.1219 will be crucial for EUR/USD.
All eyes on inflation and growth data this week
The upcoming week will see inflation data emerge as the central focus across major economies. In Australia, Q1 CPI figures (Wednesday) are expected to show a quarterly rise of 0.8% QoQ and 2.3% YoY, which could provide insight into the Reserve Bank of Australia’s policy trajectory.
Meanwhile, preliminary inflation readings from Germany and France (Wednesday) will offer a closer look at price pressures within the Eurozone, with Eurozone-wide CPI data due Friday. These data points will likely shape expectations around the European Central Bank’s (ECB) next moves.
Additionally, the US will release its Personal Income and Spending (Thursday) alongside the PCE price index—widely regarded as the Federal Reserve’s preferred measure of inflation. These figures will be closely monitored amidst ongoing speculation about the Fed’s future rate decisions.
Growth metrics will also be in focus. The US Q1 GDP preliminary reading (Wednesday) is expected to show annualized growth of 0.4%. The Eurozone will release Q1 GDP estimates as well. This, alongside PMI data from the manufacturing sector in US (Thursday) and across Europe (Friday), will offer further context on the region’s economic momentum.
The Bank of Japan (BoJ) will announce its policy decision on Thursday, with the target rate expected to remain unchanged at 0.5%.
Labour market data from the US (Friday) will be a key highlight, with nonfarm payrolls expected to rise by 123k in April, a notable slowdown from March’s strong 228k reading. The unemployment rate is forecast to hold steady at 4.2%. These figures will provide insight into the resilience of the US labour market amidst tighter monetary conditions.
The UK calendar looks light, with CBI realized sales on Monday, BRC shop price index on Tuesday and loan growth numbers due Thursday.
GBP, euro end week lower
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 29 April – 3 May
All times 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.