Dollar and euro bank notes on the table

The Weekly Wrap – It Was another U.S Dollar Fall in a Busy Week for the Markets

The Stats

It was a quieter week on the economic calendar, in the week ending 23rd April.

A total of 46 stats were monitored, following 72 stats from the week prior.

Of the 46 stats, 34 came in ahead forecasts, with 8 economic indicators coming up short of forecasts. There were 4 stats that were in line with forecasts in the week.

Looking at the numbers, 35 of the stats reflected an upward trend from previous figures. Of the remaining 11 stats, 8 reflected a deterioration from previous.

For the Greenback, it was a third weekly loss in 6-weeks. In the week ending 23rd April, the Dollar Spot Index fell by 0.76% to 90.859. In the previous week, the Dollar had fallen by 0.66% to 91.556.

Out of the U.S

It was a quieter week on the economic data front.

Key stats included weekly jobless claims and prelim private sector PMI numbers for April.

In the week ending 16th April, initial jobless claims decreased from a revised 586k to 547k. Economists had forecast an increase to 617k.

Private sector PMIs were also positive for riskier assets.

In April, the manufacturing PMI increased from 59.1 to 60.6, with the services PMI rising from 60.4 to 63.1.

Economists had forecast PMIs of 60.5 and 61.9 respectively.

In the equity markets, the Dow fell by 0.46%, with the NASDAQ and the S&P500 declining by 0.25% and by 0.13% respectively.

Out of the UK

It was a busy week.

In the 1st half of the week, employment and inflation figures were in focus.

The stats were skewed to the positive. A more modest fall in employment supported a fall in the unemployment rate in February to 4.9%. There was also a more modest rise in claimant counts, though wage growth slowed.

Inflationary pressures picked up in March, with the UK’s annual rate of inflation accelerating from 0.4% to 0.7%. A pickup in wholesale inflationary pressures suggested a further uptick in consumer prices near-term.

At the end of the week, retail sales and prelim private sector PMIs impressed.

In March, core retail sales jumped by 4.9%, following a 2.5% increase in February. Retail sales rose by a more impressive 5.4%, following a 2.2% rise in February.

From the private sector, both service and manufacturing sector activity picked up at the turn of the quarter.

The all-important services PMI rose from 56.3 to 60.1, with the manufacturing PMI increasing from 58.9 to 60.7.

In the week, the Pound rose by 0.70% to end the week at $1.3876. In the week prior, the Pound had risen by 0.53% to $1.3779.

The FTSE100 ended the week down by 1.15%, partially reversing a 1.50% gain from the previous week.

Out of the Eurozone

It was a relatively busy week on the economic data front.

Ahead of a busy Friday, key stats included German wholesale inflation and Eurozone consumer confidence figures.

At the end of the week, prelim private sector PMI numbers for April were also in focus.

The stats were skewed to the positive. Wholesale inflationary pressures picked up further, with consumer confidence across the Eurozone improving.

The private sector PMIs were also skewed to the positive.

While private sector activity in Germany expanded at a marginally slower rate, the Eurozone services sector returned to growth for the 1st time since Aug-2020.

At the turn of the quarter, the Eurozone’s manufacturing PMI hit a new all-time high, supporting a rise in the composite PMI to a 9-month high 53.7.

On the monetary policy front, the ECB was also in action in the week. In line with market expectations, the ECB stood pat on monetary policy, assuring continued support.

The decision to stand pat was positive for the European majors. From the press conference, ECB President Lagarde talked of an economic contraction in the 1st quarter, which supported the market view of unwavering policy support.

For the week, the EUR rose by 1.00% to $1.2097. In the week prior, the EUR had risen by 0.66% to $1.1977.

The DAX30 slid by 1.17%, with the CAC40 and EuroStoxx600 ended the week with losses of 0.15% and 0.78% respectively.

For the Loonie

It was another quiet week.

Inflation and house price figures were in focus in the week.

It was a mixed set of numbers. Inflationary pressures picked up in March, with the core annual rate of inflation accelerating from 1.2% to 1.4%.

House price figures disappointed, however, rising by a modest 1.1% in March. In February, house prices had risen by 1.9%.

While the stats influenced, the Bank of Canada monetary policy decision and rate statement were the key drivers.

Mid-week, the Bank of Canada talked of a likely rise in interest rates next year. While other central banks continue to talk of an extended period of support, the BoC talked of signs of a strong recovery, supporting the shift in policy outlook.

In the week ending 23rd April, the Loonie rose by 0.22% to C$1.2476. In the week prior, the Loonie had risen by 0.22% to C$1.2503.

Elsewhere

It was a bullish week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 23rd April, the Aussie Dollar rose by 0.06% to $0.7739, with the Kiwi Dollar ending the week up by 0.80% to $0.7199.

For the Aussie Dollar

It was a quiet week.

Key stats included retail sales and business confidence figures.

The stats were skewed to the positive. Retail sales increased by 1.4% in March, reversing a 0.8% fall from February.

Business confidence also improved, with the NAB Quarterly Business Confidence Index rising from 15 to 17.

While the stats were Aussie Dollar positive, the RBA meeting minutes were key in the week.

The minutes provided Aussie Dollar support, in spite of the RBA assuring continued policy support. A sharp recovery in the labor market to pre-pandemic levels supported a more optimistic economic outlook.

While the RBA does not expect to reach its targets on inflation and employment until 2024, the minutes showed that negative rates remained very unlikely.

For the Kiwi Dollar

It was a quiet week, with economic data limited to inflation figures. The stats were Kiwi Dollar positive, with inflationary pressures picking up in the 1st quarter.

Quarter-on-quarter, consumer prices increased by 0.8%, following a 0.5% rise in the 4th quarter of last year.

The annual rate of inflation picked up from 1.4% to 1.5%.

For the Japanese Yen

It was a busy week.

In the 1st half of the week, trade data was in focus.

The numbers provided some comfort, with Japan’s trade surplus widening from ¥215.9bn to ¥663.7bn in March.

Exports jumped by 16.1%, while imports rose by a more modest 5.7%.

At the end of the week, prelim private sector PMIs for April were in focus.

The services PMI remained unchanged at 48.3, while the manufacturing PMI increased from 52.7 to 53.3.

The Japanese Yen rose by 0.85% to ¥107.88 against the U.S Dollar. In the week prior, the Yen had risen by 0.79% to ¥108.80.

Out of China

It was a quiet week on the data front, with no major stats for the markets to consider.

On the monetary policy front, the PBoC left loan prime rates unchanged, which had a muted impact on the markets.

In the week ending 23rd April, the Chinese Yuan rose by 0.37% to CNY6.4963. In the week prior, the Yuan had risen by 0.49% to CNY6.5206.

The CSI300 rallied by 3.41%, with the Hang Seng ended the week up by 0.38%.