What’s been happening?

Pound Sterling – UK Markets 

The British pound fell to its lowest level against the euro in three weeks and posted small gains vs the dollar as the lack of macroeconomic data releases from the UK paved the way for a choppy session on Friday.

In an interview with Sky News on Friday, British finance minister Philip Hammond said that with the EU granting an extension to October 31, no-deal Brexit was no longer an immediate threat. Hammond further added that they were expecting a substantial increase in business investment once Brexit is resolved. On a similar note, the International Monetary Fund Managing Director Christine Lagarde at a news conference during the IMF and World Bank spring meetings in Washington argued that the Brexit delay averted a terrible outcome. “It probably gives time for economic agents to better prepare for all options, particularly industrialists and workers, in order to try to secure their future,” Lagarde elaborated. 

US Dollar – US Markets

The data published by the U.S. Bureau of Labor Statistics on Friday showed that import prices increased by 0.6% on a monthly basis in March to surpass the market expectation of +0.4%. Other data from the U.S. revealed that the consumer confidence deteriorated in April with the University of Michigan’s Consumer Sentiment Index edging lower to 96.9 in the advanced estimate from 98.4 in March. “The data do suggest that consumers thought that its stimulative impact on the overall economy has now run its course. What has been of increasing importance to consumers are rising nominal incomes, and low inflation, producing strong gains in inflation-adjusted incomes,” Surveys of Consumers chief economist, Richard Curtin, said.

With investors staying focused on the risk-sensitive assets, the greenback struggled to find demand on Friday and the US Dollar Index dropped to its lowest level of April to close down 0.53% on a weekly basis.    

Euro – European Markets

The shared currency took advantage of the risk-positive environment and gained value against both the dollar and the pound sterling. 

In his prepared statement to be delivered at the thirty-ninth meeting of the International Monetary and Financial Committee in Washington on Friday, Mario Draghi, President of the ECB, reiterated that the outlook for the euro area fundamentally depended on global growth momentum and added that the escalation of trade tensions and the downturn in the global manufacturing had increased the eurozone's external headwinds. “The persistence of uncertainties related to geopolitical factors, rising protectionism and vulnerabilities in emerging markets poses downside risks to the euro area growth outlook,” Draghi added. Meanwhile, citing people familiar with the matter, Reuters reported that an internal model used by the ECB presented at last week’s MPC meeting showed that the economic growth in the eurozone could continue to slow in the second quarter to suggest that the recovery could be delayed further than initially expected.

Meanwhile, the Eurostat reported that industrial production in February contracted by 0.2% on a monthly basis to beat the analysts’ estimate of -0.6%. 

What’s coming up? 

UK: There won’t be any macroeconomic data releases from the UK on Monday.

US: The NY Fed’s Empire State Manufacturing Index will be the only data release from the U.S. Later in the day, Chicago Fed President Evans is scheduled to deliver a speech.

EU: There won’t be any macroeconomic data releases from the euro area.