Overall, economic data coming out of the G10 countries looks set to reinforce the ongoing global economic recovery, fuelling optimism across financial markets, despite ongoing short-term pandemic-driven headwinds.

The key drivers of currency direction through May:  

• Inflation (CPI) data remains in focus, particularly in the US where fiscal stimulus prompts fears of an increase in interest rates
• Increasing volatility in equity and bond markets, which could spill over into currency markets and weigh on risk currencies
• Commentary from central banks suggesting any moves away from current accommodative policy could trigger volatility

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