US dollar continues to strengthen
Daily Currency Update
On Friday UK retail sales figures for February were released. It fell 0.3% while it was forecasted to rise by 0.6%. This was a surprisingly bad reading and looked even worse when compared to the 1.9% rise in retail sales recorded in January. The pound did not seem to move too much off the back of this, though later in the day GBP/USD appeared to dip a little due to US dollar strength. The pound dropped towards the 1.3150 mark vs the US dollar.Later in the session, market sentiment appeared to improve, which generally favours currencies that have a higher sensitivity to risk, such as the pound. However GBP/USD did not recover that much, likely being capped by the disappointing retail sales released earlier in the day and the increased appetite for the US dollar.
Key Movers
On Friday the US dollar rose against most of its major rivals, posting gains for the third day in a row. In turn it also capped off the sixth week out of seven where it strengthened. The US dollar has gained from its status as a safe-haven currency for investors. Safe-haven currencies tend to increase in value during times of global risk and uncertainty which is partly why the dollar has seen a lift throughout the Russia-Ukraine war.The euro on the other hand has experienced weakness during this time, likely in part due to the ongoing war effecting many of the countries within the Eurozone. Unlike the US dollar, the euro has experienced decline six out of the last seven weeks, with EUR/USD now holding under the 1.10 mark. Looking ahead to this week there are some key events for the US and the Eurozone. In the US March nonfarm-payrolls and unemployment rates are due on Friday. In Europe, inflation data will be the main talking point, with inflation expected to continue to trend upwards as it did during the month of February.
Expected Ranges
- GBP/USD: 1.3190 - 1.3105 ▼
- GBP/EUR: 1.2060 - 1.1975 ▲
- GBP/AUD: 1.7520 - 1.7405 ▼
- EUR/USD: 1.0925 - 1.1005 ▼