On Thursday, April 17, markets showed a positive shift in sentiment as US stock index futures gained approximately 1% before the European session. Investors are anticipating key announcements from the European Central Bank (ECB) later today, including the ECB’s monetary policy decisions and a press conference with President Christine Lagarde. Additionally, the US economic calendar will feature the weekly Initial Jobless Claims and March Housing Starts data.
Key Currency Movements:
US Dollar (USD): The USD was the weakest against the New Zealand Dollar this week, losing 1.39%. It was also weaker against the Australian Dollar, Euro, and Pound Sterling.
EUR/USD: The pair surged by more than 1% on Wednesday, reaching its highest daily close since February 2022 at 1.1400. It has corrected slightly lower to around 1.1350 in Thursday’s early European session.
GBP/USD: The Pound gained slightly on Wednesday but faced challenges from softer-than-expected inflation data in the UK. The pair is holding above 1.3200 today.
Gold: Safe-haven demand pushed gold prices to new highs, briefly exceeding $3,350 in Asian trading before retreating to around $3,330.
Market Influences:
Trade Tensions: US-China trade relations remain a concern, with Wall Street suffering losses on Wednesday due to fears of escalating tensions. China dismissed concerns about tariffs, while President Trump mentioned “big progress” on trade talks with Japan.
US Federal Reserve: Chairman Jerome Powell reaffirmed that the Fed remains patient and will wait for more clarity on economic conditions before making changes to its policy stance.
ECB Expectations:
The ECB is widely expected to cut interest rates by 25 basis points during its meeting today, marking the sixth consecutive rate reduction. This move follows concerns about easing inflation and the impact of US tariffs. Investors are keen to hear Lagarde’s comments on the ECB’s future outlook, particularly regarding inflation and economic growth in the face of global uncertainties.
Other Notable Developments:
USD/CAD: The pair faced bearish pressure on Wednesday, closing in negative territory. The Bank of Canada held its policy rate steady at 2.75%.
AUD/USD: Australia’s unemployment rate edged up to 4.1%, while employment change figures showed a gain of 32,200 jobs. The Australian Dollar reversed some of its earlier gains but is still showing resilience.
USD/JPY: After a 1% drop on Wednesday, USD/JPY recovered slightly, trading above 142.50 as Japan plans another round of trade negotiations with the US.
In conclusion, today’s market movements are largely driven by expectations surrounding the ECB’s policy decisions and the ongoing US-China trade developments. Investors will also be watching the latest US economic data for additional clues on the economic outlook.
Related Topics:
Bank of Canada Holds Rates Amid Inflation and Trade Tensions
