What’s been happening?

UK: Although the pound is riding high at present against the euro and the US dollar, there are still elements of risk to consider for sterling. Let’s be very aware that we are still not out of the Brexit negotiation woods and France has publicly talked about the need for a ‘hard’ Brexit. Economic growth has also cooled with QoQ GDP coming in 0.2% lower for the UK which can all point to potential pound weakness over the long-term. Investors will do well to not get greedy and secure some of their risk for the months ahead.

EU: Things are starting to cool in the European economy and sentiment is starting to shift to the negative side. The pull back from the ECB in terms of ending QE did nothing but damage the euro last week so this week’s German business confidence figure (ZEW) will be key to halt any further euro punishment. On that front, the expectation is to come in lower than last month’s positive reading of 5.1. There are also continued pockets of concern within the eurozone in several countries. None more so than in France where President Macron faces industrial action over the next three months. Expect a rocky week for the euro.

US: President Trump has been busy of late and has a lot to contend with on his political plate. The coalition air strikes on Syria over the weekend, although concerning, have not given tremendous cause for alarm as it seems like this will not lead to any great escalation of the situation. We will see the releasee of retail sales today with an increase expected. The US has posted good data of late and with another strong figure out of the States at 13:30 today, we could see the greenback rally trimming any sterling and euro gains over the morning trading session.

What’s coming up?

UK: This week Tuesday we have average earnings followed by CPI on Wednesday. With the expectation of an interest rate rise next month, both figures will be keenly watched by market participants and add significant importance to the potential of a rate rise.

EU: German ZEW Survey at 09:00 on tomorrow followed by eurozone CPI are the two big figures this week out of Europe.

US: Retail sales will come out at 13:30 today for the month of March and industrial and manufacturing production is due out tomorrow.


Commodity currencies like the Aussie fell sharply against the greenback from recent highs, because of planned air strikes against Syria at the weekend. Risk reversal has been seen across markets with some safe haven currencies like the yen and Swiss Franc benefiting as a result, although not to any great extent. The cooling of the situation has meant that certain currencies like CAD and the Kiwi dollar have started to recover. Markets await the Trade Balance report out of japan on Tuesday and the Bank of Canada’s interest rate decision on Wednesday, but with no change expected out of Canada.