The Euro was under pressure for the majority of last week, trading from early highs of 1.0900 against the Dollar to lows of 1.0730 while settling at .8750 against Sterling after sharp intraweek swings. The main driver of weakness was extremely poor economic data as April PMIs set record lows while the lack of agreement from EU leaders over a crisis recovery plan also weighed. The main focus for markets this week will be the ECB meeting on Thursday.
Last week saw a modest resumption of the recent volatility in UK markets with Sterling losing ground in line with other risk sensitive currencies as equity markets declined. Similar to other countries, data over the course of the weak painted a bleak economic outlook and contributed to the Pound losing 2% on the week at one point before recovering ground. The data calendar is light this week with PMI Manufacturing data the main focus on Friday.
Renewed weakness in stock markets last week led to demand for save haven currencies and as a result the Dollar performed well across the board. A series of very weak data prints and the reality that a suitable vaccine is potentially a long way into the future tempered recent equity bullishness and pushed the Greenback to one month highs. The Federal Reserve meets this Wednesday with no change expected on interest rates.