Another weekly wrap to get you up to speed with G7 currencies latest forex news – all in one place. This time around, investors shied away from the American dollar as sentiments turned positive towards the end of the week.
While other safe-haven currencies took top spots, the American dollar closed the week a big loser.
Which Fundamentals drove the forex market for the week ending 25th April 2021?
COVID-19 news, monetary policies, economic data, and a hint of a capital gains tax hike primarily drove the forex market.
COVID 19 news still a threat
Continued spike in new coronavirus cases globally weighed heavily on the risky assets. Sadly, infections in India hit a global new record with over 300K new cases recorded in a single day.
War on the virus is still far from over, evident by the massive spikes in Asia and some parts of the US and Europe. While there are still some troubling spots in the g7 countries, life is slowly returning to normal, thanks to the continuing vaccination rollout.
Economic Data
Boosted by fiscal stimulus packages and sustained coronavirus vaccination rollout, g7 economies have rebounded faster. In the week, the G7 economies posted positive economic data, which led to the downfall of the American dollar.
Biden’s Capital tax
According to the latest forex news, President Biden unveiled plans to raise long-term capital gains tax for the wealthiest Americans from 23.8% to 43.4%. News of the planned taxes hit financial headlines on Tuesday, pushing the American dollar down while uplifting the counter currencies.
Crude fx
Crude fx news shows that oil prices dropped by 1.57% to close at $62.14 per barrel over the week. The weakening US dollar uplifted oil prices, but the coronavirus surge ultimately led to its downfall. Also, high oil inventory in the US pushed oil prices down.
G7 Performance and Economic Review
Table: performance summary
| Currency pair | 19th April | 25th April | Average | Percentage change | Remarks |
| USD | 91.050 | 90.839 | 91.113 | 0.770 | decrease |
| GBP USD | 1.3983 | 1.3873 | 1.3905 | 0.3109 | decrease |
| EUR USD | 1.2033 | 1.2093 | 1.2051 | 0.9221 | increase |
| USD CHF | 0.9150 | 0.9143 | 0.9153 | 0.6250 | decrease |
| USD JPY | 108.15 | 107.96 | 108.02 | 0.75 | decrease |
| USD CAD | 1.2532 | 1.2480 | 1.2516 | 0.1879 | decrease |
| AUD USD | 0.7739 | 0.7745 | 0.7738 | 0.1487 | increase |
| NZD USD | 0.7180 | 0.7193 | 0.7186 | 0.7212 | increase |
USD
The American dollar suffered yet another third weekly loss in six weeks. It dropped by 0.76% to 90.859 following the previous loss of 0.66%. Key economic statistics that drove the performance of the greenback include initial jobless claims and private sector numbers for April.
Both data were positive to riskier assets. Contrary to an earlier projection of 617K, initial jobless claims dropped to 547K. In the week, the initial jobless claims decreased from a revised 586k to 547k.
As expected, private sector PMIs figures improved but better than the projections. Economists had predicted manufacturing to increase to 60.5 and the service sector to hit 61.9. However, the service sector increased from 60.4 to 63.1 while the manufacturing index rose from 59.1 to 60.6.
Sentiments by US president Joe Biden on the additional tax measures led to further weakening of the dollar.
GBP Forex News
The UK had a busy week on the economic calendar. And according to gbp forex news, the pound rallied by 0.70% to 1.3876. Previously, the pound had increased by 0.53% to 1.3779 against the American dollar.
Early in the week, employment and inflation figures supported the pound. The unemployment rate dropped to 4.9%, while inflationary pressure rose to 0.7% from 0.4%. Towards the end of the week, the UK released positive economic data that significantly uplifted its currency.
Retail sales jumped by 5.4b% following a 2.2 previous increase. Also, core retail sales impressed, rising by 4.9% from an earlier 2.5% growth. In the private sector, both manufacturing and service indexes supported the pound. The manufacturing index rose from 58.9 to 60.7, while the service sector jumped from 56.3 to 60.1.
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EUR USD News Analysis
In the Eurozone, most parts of the week were quiet on the economic calendar. However, the week ended on a busy day on Friday. Ahead of the busy Friday, positive economic data ensured the euro started the week stronger.
Eurozone consumer confidence and german wholesale inflation figures were favorable to the euro. On Friday, the prelim private sector index went up further uplifting the euro. As private sector activities in Germany continued to improve, the eurozone services sector picked up for the first time since August 2020.
The ECB also featured in eur usd news analysis to uplift the euro. As expected, the ECB left monetary policies unchanged and reassured the market of its unwavering support.
In a press conference, ECB president Lagarde showed the market might contract in the 1st quarter. At the end of the week, the euro expanded by 1.00% after rising by 0.66% in the previous week.
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CHF to USD
This currency traded in the red throughout the week, driven by a weaker dollar and spike in covid 19 infections in some countries. Also, a reduction in the US treasury bonds favored the chf to usd.
The Swiss franc ended the week stronger, growing by 0.6250% against the American dollar to close at 0.9143. On Friday, Switzerland National Bank reiterated that it would continue with currency intervention after the US dropped it from the list of currency manipulators.
US dollar vs Canada dollar
It was another quiet week in Canada that resulted in its currency strengthening against the American dollar. The Canadian dollar grew by 0.22% to close at 1.2476, rising by the same margin in the previous week.
House price and inflation’s latest forex news significantly affected the us dollar vs Canada dollar exchange. While the inflationary pressure supported the Lonnie, house price figures disappointed. The inflation rate sped up to 1.4% from 1.2%, and the increase in house prices dropped from 1.9% to 1.1%.
The Bank of Canada (BoC) latest forex news also affected the performance of usd cad currency pair. As other Banks left interest rates unchanged, BoC suggested it may increase the rates next year. BoC arrived at this decision based on a robust economic recovery.
Also, BoC announced it would reduce bond purchasing so soon. The announcement resulted in a short-lived bullish run midweek for the Canadian dollar. In addition, a continued spike in covid 19 new cases and slug in vaccination rollout weakened the Canadian dollar against the American greenback.
Meanwhile, it was a bullish week for the Aussie Dollar, the Kiwi Dollar, and the Japanese yen in the Asia-Pacific region.
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American to AUD Currency
In a relatively quiet week in Australia, the Aussie rose by 0.06% to close at 0.7739. The key economic data that drove the American to aud currency performance include retail sales and business confidence figures. All these economic data were positively skewed.
The retail sales reversed the previous 0.8% fall and increased by 1.4%. Consumer confidence also impressed, and the Business Confidence Index moving from 15 to 17. While the economic data uplifted the Aussie Dollar, the RBA meeting minutes were key to its performance.
Despite assuring the market of its continued support, the minutes provided more support for the Aussie Dollar. A decision arrived by a sharp labor market strong recovery to pre-pandemic level pointing to faster economic growth.
RBA further showed it does not expect to reach its targets on employment and inflation until 2024, but negative rates remain very unlikely.
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US Currency to NZD
In the latest forex news, the New Zealand dollar rallied by 0.80% to close at 0.7199 against the American dollar. It was a quiet week in New Zealand, with positive economic data driving us currency to nzd performance.
Quarterly, consumer prices spiked by 0.8% after a 0.5% previous increase. Also, the annual inflation rate increased from 1.4% to 1.5%.
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Japanese Yen Latest News
According to the Japanese yen latest news, Japan had a busy week on the economic calendar.
Supported mainly by positive economic data, the Japanese Yen rallied by 0.85% to 107.88 against the American Dollar. In the week before, it had risen by 0.79%. Japan’s trade surplus widened from ¥215.9bn to ¥663.7bn in March. Impressively export spiked by 16.1%, and imports rose modestly by 5.7%.
On Friday, prelim private sector PMIs for April boosted the yen slightly. The service sector remained unchanged while the manufacturing index increased to 53.3 from 52.7. According to the latest forex news, the continued rise in new COVID-19 cases and U.S President Biden’s tax on the wealthiest Americans did the damage.
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Conclusion
The US dollar lost against the g7 currencies except for the British pound. Positive economic data and the continued vaccination rollout program uplifted the riskier assets and other safe-haven currencies.
Significantly, Biden’s additional tax measures in the Latest forex news led to the dollar’s downfall.
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