Global currency markets will move on the back of the results of the first phase of French Elections and on the back of Trump Tax Reforms to be announced this week. USD was under pressure last week amid accelerating geopolitical tensions, weak economic data, uncertainty over French elections and appreciating British Pound as British Prime Minister Theresa May called for early elections in June. USD Index (DXY), which tracks the movement of the USD against six major currencies, fell by 0.53% on a week on week basis and is at a level of 99.98.
North Korea – Despite China’s efforts to dissuade North Korea from carrying out continued missile tests, North Korea attempted to fire a ballistic missile on Sunday but it blew up almost immediately. U.S. Vice President Mike Pence on Monday responded to North Korea’s failed missile test attempt, warning that “the era of strategic patience” with North Korea is over. Further, U.S. Vice President Mike Pence reassured Japan and other U.S. allies of Washington’s commitment to reining in North Korea’s nuclear and missile ambitions.
British pound hit its highest level in 6-months after British Prime Minister Theresa May called for early elections, heightening the expectations that May will win a substantial majority, securing her position ahead of talks with the European Union on the terms for Brexit. British Pound appreciated by 2.35% against USD last week.
Euro appreciated by 1.04% against USD last week despite uncertainty ahead of the first round of the French presidential elections, scheduled on Sunday 23rd April. The race tightened after a surge in polls for far-left candidate Jean-Luc Melenchon, who wants a referendum on the country’s European Union membership. However, the Euro weakened on Friday after a French policeman was shot dead and two others were wounded in central Paris on Thursday night in an attack claimed by the Islamic State.
U.S. Commerce Department reported that housing starts fell in March, likely due to bad weather, while building permits rose. Housing starts fell by 6.8% to hit a level of 1.215 million units in the month of March, down from February’s total of 1.303 million units. The number of building permits issued rose by 3.6% to a level of 1.260 million units in the month of March from 1.213 million in February.
Data released on Monday showed that Empire State manufacturing survey fell to a reading of 5.2 in April, against the expectation for a reading of 15.
A separate report showed that U.S. industrial production rose by 0.5% in the month of March, which was largely in line with the expectation, while manufacturing production unexpectedly fell by 0.4% last month.
U.S. Department of Labour on Thursday reported that the number of individuals filing for initial jobless benefits in the week ended 15th April rose by 10,000 to 244,000 from previous week’s total of 234,000 against the expectations of a rise of 8,000 to 242,000.
Federal Reserve Bank of Philadelphia reported that its manufacturing index fell to 22.0 this month from March’s reading of 32.8 against the expectation for the index to decline to 25.
U.S. National Association of Realtors reported that existing home sales rose by 4.4% in the month of March to 5.71 million units from the February reading of 5.47 million units and against the expectation of a rise of 2.5% to 5.60 million units.
Asian currencies were largely mixed last week against the USD. Australian Dollar depreciated by 0.5%, New Zealand Dollar appreciated by 0.34%, Japanese Yen depreciated by 0.41% against the USD and by 1.35% against the Euro. South Korean Won appreciated by 0.49%, Philippines Peso depreciated by 0.49%, Indonesian Rupiah depreciated by 0.36%, Indian Rupee depreciated by 0.31% against the USD and by 0.89% against the Euro, Chinese Yuan depreciated by 0.01%, Malaysian Ringgit appreciated by 0.18% and Thai Baht appreciated by 0.13%.