Here’s what you need to know for the week ahead:
Markets offer mixed signals amid an uncertain outlook. Even the central bankers don’t know what to do next. Following the crucial US economic data, what is clear is that the economy is weakening and inflation is slowing. One more week passed without a bank failure.
The dollar The US staged a strong recovery on Friday, paring weekly losses. Despite the recovery, the trend remains bearish. Expectations point to a final rate hike by the Federal Reserve (Fed) in May and a long pause, before rate cuts. The bond market sees a recession ahead and, by the end of the year, interest rates lower than current ones.
Next week, the S&P Global PMIs will offer the first look at economic activity for the month of April around the world, an essential report in times of concern about growth and the “data-reliance” of central banks. Growth data from China will show the extent of the reopening. The latest export data was encouraging, supporting global risk sentiment.
The Dollar Index fell for the fifth week in a row and posted the lowest weekly close since May. He DXY it closed above 101.50, far from lows, a positive sign for the dollar that does not suggest a reversal yet, but could point to consolidation.
As it has been since the end of February, EUR/USD rallied for another week and reached its highest level in a year above 1.1000. The trend is still up, but there are some signs of exhaustion. The Eurozone PMIs for next week could be crucial for the expectations of the European Central Bank (ECB). Markets see the ECB raising rates further, but weak numbers could change the outlook for the second half of the year.
GBP/USD ended flat around 1.2400 after pulling back from a multi-month high above 1.2500. Deteriorating risk sentiment on Friday weighed on the pound, which lagged against the euro. EUR/GBP posted the highest weekly close since February, above 0.8850. Key UK data will be released next week, including employment figures and consumer inflation.
The USD/JPY pair closed the week little changed, with slight gains near the 133.00 area. The Japanese yen lost strength amid risk appetite and after hopes of a turnaround in the Bank of Japan’s (BOJ) monetary policy stance were dashed following the first press conference by Kazuo Ueda, the new governor. .
USD/CHF continued to fall, breaking decisively below 0.9000, to hit the weakest level since January 2021. The Swiss and London francs were the most bullish in the G10. USD/CAD bottomed around 1.3300, the lowest level since February, and then rebounded to 1.3400, ending the week down 140 points. Consumer inflation (Tuesday) and retail sales (Friday) will be published next week in Canada.
When it looked like the AUD/USD was ready to break above 0.6800, it pulled back, holding in the known range near 0.6700. This week’s data showed strength in the labor market. The Reserve Bank of Australia (RBA) will stand by for its next meeting. Next Tuesday, the central bank will publish the minutes with details on the decision to pause the tightening cycle.
The NZD/USD pair continued to pull back from the 0.6378 high, reached after the Reserve Bank of New Zealand’s (RBNZ) 50 basis point rate hike, and ended near 0.6200. First quarter New Zealand inflation will be released on Thursday.
Latin American currencies posted the best weekly results, despite Friday’s falls. The Colombian peso and the Chilean peso rose more than 2.5% each against the US dollar.
Gold it peeked to year highs and stopped, falling back to $2,000 on Friday. The trend remains bullish, but the sharp correction raises questions about the near-term upside potential. Silver lost 2% on Friday, paring some of its weekly gains but still posting its fifth straight gain.
Bitcoin gained 8% for the week and remained above $30,000, at its highest level since June 2022.
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
