The Weekly Wrap – Monetary Policy and Economic Woes Drive Dollar Demand

pOf the 56 stats, 26 beat forecasts, with 26 economic indicators falling short of forecasts. 4 stats were in line with forecasts.p

pLooking at the numbers, 30 of the stats reflected an upward trend. Of the remaining 26 stats, 25 stats were weaker.p

divdivdiv classBodysc17zpet90 cdBBJodivh2 idoutoftheusOut of the USh2

pCore durable goods orders and consumer sentiment drew interest on Tuesday. The stats were market positive, with core durable goods orders rising by 1.1 in March.p

pConsumer sentiment held steady in April, which was also market positive. The CB Consumer Confidence Index slipped from 107.6 to 107.3.p

pOn Thursday, US GDP numbers disappointed, however, with the US economy contracting by 1.4. In the previous quarter, the economy expanded by 6.9.p

pAt the end of the week, inflation and personal spending were market positive. Personal spending rose by 1.1 in March, while inflationary pressures softened. The Core PCE Price Index increased by 5.2 year on year in March, down from 5.3 in February.p

pIn the week ending April 29, 2022, the Dollar Spot Index surged by 1.72 to end the week at 102.959. In the week prior, the Index rose by 0.72 to 101.22.p

h2 idoutoftheukOut of the UKh2

pIt was a particularly quiet week, with stats limited to CBI Industrial Trend Orders. In April. Industrial Trend Orders fell from 26 to 14, which was Pound negative.p

pRisk aversion and market sentiment towards Fed monetary policy ultimately left the Pound deep in the red.p

pIn the week, the a hrefhttps:www.fxempire.comcurrenciesgbpusdPounda tumbled by 2.07 to end the week at 1.2573. In the week prior, the Pound slid by 1.69 to 1.2839.p

pThe FTSE100 ended the week up 0.30, partially reversing a 1.24 loss from the previous week.p

h2 idoutoftheeurozoneOut of the Eurozoneh2

pEarly in the week, German business and consumer sentiment diverged. While business sentiment improved, consumer sentiment weakened further.p

pThe Ifo Business Climate Index increased from 90.8 to 91.8 in April, while the Gfk German Consumer Climate Index fell from 15.7 to 26.5.p

pIn the second half of the week, the market focus shifted to inflation and economic growth.p

pThe stats were market positive, with German and the Eurozone GDP numbers for the first quarter providing support.p

pIn Q1 2022, the German economy expanded by 4.0 year on year, up from 1.8 in the previous quarter.p

pThe Eurozones economy grew by 5.0 year on year, up from 4.6 in the quarter prior.p

pOn the inflation front, inflationary pressures ticked up further, though only moderately. According to prelim figures, the Eurozones annual rate of inflation picked up from 7.4 to 7.5.p

pFor the week, the a hrefhttps:www.fxempire.comcurrencieseurusdEURa slumped by 2.27 to 1.0545. In the previous week, the EUR fell by 0.19 to 1.0790.p

pThe CAC40 fell by 0.73, with the EuroStoxx600 and the DAX seeing losses of 0.64 and 0.31, respectively.p

h3 idfortheloonieFor the Loonieh3

pIt was also a quiet week, with economic data limited to February GDP numbers.p

pWhile Loonie positive, the numbers had a muted impact on the Loonie following the latest Bank of Canada rate hike.p

pIn February, the economy grew by 1.1, accelerating from 0.2 growth in January.p

pIn the week ending April29, the a hrefhttps:www.fxempire.comcurrenciesusdcadLooniea slid by 1.09 to C1.2848 against the Greenback. The Loonie fell by 0.79 to C1.2710 in the week prior.p

h2 idelsewhereElsewhereh2

pIt was yet another bearish week for the a hrefhttps:www.fxempire.comcurrenciesaudusdAussie Dollara and the a hrefhttps:www.fxempire.comcurrenciesnzdusdKiwi Dollara.p

pThe Aussie Dollar tumbled by 2.53 to 0.7061, with the Kiwi Dollar sliding by 2.73 to end the week at 0.6458.p

h3 idfortheaussiedollarFor the Aussie Dollarh3

pInflation was in focus midweek.p

pThe stats were Aussie Dollar positive, supporting a nearterm RBA move on cash rates. Monetary policy divergence remained strongly in favor of the Greenback, however.p

pIn Q1, Australias annual rate of inflation accelerated from 3.5 to 5.1. Wholesale inflationary pressure also picked up, with the annual wholesale rate of inflation accelerating from 3.7 to 4.9.p

h3 idforthekiwidollarFor the Kiwi Dollarh3

pTrade data and business confidence were in focus in the week, with the stats Kiwi dollar negative.p

pIn March, New Zealands trade deficit widened from NZ8,680m to NZ9,110m.p

pThe ANZ Business confidence slipped from 41.9 to 42.0 in April.p

h3 idforthejapaneseyenFor the Japanese Yenh3

pOn the economic data front, industrial production and retail sales figures for March were in focus. The stats were Yen negative.p

pIndustrial production increased by a modest 0.3 after rising by 2.0 in February.p

pRetail sales provided some relief, rising by 0.3 year on year. In February, retail sales declined by 0.9.p

pOn the monetary policy front, the Bank of Japan was also in action, though there were no surprises to support the Yen.p

pThe a hrefhttps:www.fxempire.comcurrenciesusdjpyJapanese Yena fell by 0.93 to end the week at ¥129.70 against the Dollar. In the week prior, the Yen ended the week down by 1.61 to ¥128.50.p

h3 idoutofchinaOut of Chinah3

pIt was a particularly quiet week, with no economic data from China to influence market risk sentiment.p

pIn the week ending April29, the Chinese Yuan slid by 1.65 to CNY6.6085. The Yuan tumbled by 2.04 to CNY6.5014 in the week prior.p

pThe Hang Seng Index ended the week up 2.18, with the CSI300 gaining by 0.07.p

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