The dust did indeed settle at least some last week and we witnessed less volatility compared to previous weeks in the market. A 0.8% average swing was seen across most currencies, down from the minimum of 1.5% in recent weeks.
The trend of a stronger €, weaker $ and indifferent £ are all still at play.
This week sees major market moving events occurring, but, we expect all to be non-events in the end. As far as the UK is concerned, the jobs data being released Thursday morning is due to be consistent with previous and the BoE interest rate decision (and vote) is expected to remain the same.
As always, any deviation will create volatility, however we don't expect this to happen this time round. £-€ is down by 1% in the last month with £-$ up by 3% in the same time-frame, which perfectly highlights March's trend thus far..
EUR
The anticipated Euro retreat hasn't materialized as yet. But, with only inflation figures being released out of the Euro-Zone this week, we could see € weakness naturally occurring from its out-performance of late.
Note, the only reason we expect to see the Euro lower compared to current levels is because of the rapid gains it has made in recent weeks. Yes, fundamentally the Euro has increased in value, however, history in this game tells us what goes up quickly, must go down at least some..
USD
£-$ is facing strong resistance at 1.30 mid-market levels. October last year was the last time the pair had a spell above this mark. A swift 3% has already been made recently and so pushing through and staying above the 1.30 barrier will take something special.
We can't personally see that happening this week, but in the longer term we believe we will be (Trump dependent of course). Traders will be watching closely what Fed Chair Powell says about interest rates after US stocks correct/crash depending on who you talk to..
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