News & analysis

Currency markets hit a bit of a lull this week, with a quiet US data calendar seeing relatively limited price action for the greenback. Instead, the main events largely took place outside the US. European PMIs were accompanied by Q1 negotiated wage data, offering a mixed steer on the prospects for eurozone inflation. Canadian CPI, meanwhile, emphasised the need for BoC easing in June, with all key readings now back within the Bank’s tolerance band, while a hot CPI reading out of the UK was overshadowed by the announcement of a snap general election, set to take place on July 4th. Elections are likely to continue as a major theme for markets next week too as voters head to the polls in South Africa, with risks that the ANC may lose their majority in the National Assembly. On the data front, Canadian GDP, eurozone inflation data and April’s PCE are set to be the major events of note. A soft print for the first of these could well see BoC easing expectations accelerate once again, weighing on the loonie. The latter two however are unlikely to shift the short-term narrative for either the ECB or the Fed. The ECB looks wedded to the idea of a June rate cut. The Fed meanwhile looks unlikely to cut rates until September at the earliest, regardless of next weeks print. 

You can read the Week Ahead in full here:




Simon Harvey, Head of FX Analysis

María Marcos, FX Market Analyst

Nick Rees, FX Market Analyst


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