The Weekly Wrap – FED Chair Powell Drives the Dollar Spot Index to 101

  div classBodysc17zpet90 cdBBJodivh2 idthestatsThe Statsh2

  pIt was a busy week on the a hrefhttps:www.fxempire.comtoolseconomiccalendareconomic calendara for the week ending April22, 2022.p

  pA total of 57 stats were monitored, following 59 stats in the week prior.pdivdivdiv classBodysc17zpet90 cdBBJodiv

  pOf the 57 stats, 31 beat forecasts, with 25 economic indicators falling short of forecasts. One stat was in line with forecasts.p

  pLooking at the numbers, 33 of the stats reflected an upward trend. Of the remaining 24 stats, all 24 stats were weaker.p

  divdivdiv classBodysc17zpet90 cdBBJodivh2 idoutoftheusOut of the U.Sh2

  pIt was a quiet start to the week, with the markets needing to wait until Thursday for the key numbers.p

  pIt was a mixed set of numbers. Jobless claims fell from 186k to 184k in the week ending April 15. The Philly Fed Manufacturing Index disappointed, however, falling from 27.4 to 17.6.p

  pOn Friday, prelim private sector PMIs for April also drew interest.p

  pThe Manufacturing PMI increased from 58.8 to 59.7, while the Services PMI declined from 58.0 to 54.7.p

  pThe mixed set of numbers came amidst some hawkish Fed Chair Powell chatter.p

  pOn Thursday, Fed Chair Powell a hrefhttps:www.federalreserve.govnewseventsspeechpowell20220321a.htm relnofollow noopener noreferrer target_blankspokea at the Annual Economic Policy Conference National Association for Business Economics.p

  pThere were two key takeaways from the Powell speech. Firstly, the prospect of a fiftybasis point rate hike.p

  pDiscussing restoring price stability, Powell said,p

  p“If we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or in meetings, we will do so. And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well.”p

  pSecondly, Powell talked of the challenges of bringing down inflation without bringing down the economy.p

  pConcerning growth, Powell said,p

  p“I hasten to add that no one expects that bringing about a soft landing will be straightforward in the current context – very little is straightforward in the current context. My colleagues and I will do our very best to succeed in this challenging task.”p

  pThe combination of a more rapid move to policyneutral and possible beyond and the threat of recession weighed on riskier assets.p

  pIn the week ending April 22, 2022, the Dollar Spot Index gained 0.72 to end the week at 101.22. In the week prior, the Index rose by 0.71 to 100.50.p

  h2 idoutoftheukOut of the UKh2

  pRetail sales and private sector PMIs for April were the key stats of the week. The stats were Pound negative.p

  pCore retail sales slid by 1.1 in March, with retail sales tumbling by 1.4.p

  pAccording to prelim April figures, the services PMI declined from 62.6 to 58.3, while the manufacturing PMI rose from 55.2 to 55.3.p

  pIn the week, the a hrefhttps:www.fxempire.comcurrenciesgbpusdPounda slid by 1.69 to end the week at 1.2839. In the week prior, the Pound rose by 0.27 to 1.3060.p

  pThe FTSE100 ended the week down 1.24, reversing a 0.68 loss from the previous week.p

  h2 idoutoftheeurozoneOut of the Eurozoneh2

  pEarly in the week, the Eurozone economy was in the spotlight.p

  pThe stats were EUR positive, though not good enough to counter hawkish Fed Chair Powell chatter from later in the week.p

  pIn February, industrial production rose by 0.7, reversing a 0.7 decline from January. Trade data was also EUR positive, with the trade deficit narrowing from €27.3bn to €7.6bn.p

  pConsumer confidence was also on the rise, despite the ongoing war in Ukraine.p

  pAt the end of the week, prelim private sector PMIs for April disappointed, however. Germanys manufacturing PMI declined from 56.9 to 54.1, leaving the Eurozone Manufacturing PMI down from 56.5 to a 15month low of 55.3.p

  pService sector activity accelerated due to easing COVID19 restrictions, supporting a rise in the composite PMI from 54.9 to 55.8.p

  pFor the week, the a hrefhttps:www.fxempire.comcurrencieseurusdEURa fell by 0.62 to 1.0810. In the previous week, the EUR fell by 0.62 to 1.0810.p

  pIn the week, the EuroStoxx600 slid by 1.42, with the CAC40 and the DAX seeing losses of 0.12 and 0.15, respectively.p

  h3 idfortheloonieFor the Loonieh3

  pThe market focus was on inflation and retail sales during the week.p

  pThe stats were Loonie positive, with Canadas annual rate of core inflation accelerating from 4.8 to 5.5. The jump supported the market expectation of more BoC rate hikes in the months ahead.p

  pRetail sales rose by a further 0.10 in February, with core retail sales increasing by 2.10.p

  pIn the week ending April22, the a hrefhttps:www.fxempire.comcurrenciesusdcadLooniea fell by 0.79 to C1.2710 against the Greenback. In the week prior, the Loonie fell by 0.30 to C1.2610.p

  h2 idelsewhereElsewhereh2

  pIt was another bearish week for the a hrefhttps:www.fxempire.comcurrenciesaudusdAussie Dollara and the a hrefhttps:www.fxempire.comcurrenciesnzdusdKiwi Dollara.p

  pThe Aussie Dollar tumbled by 2.04 to 0.7244, with the Kiwi Dollar sliding by 1.85 to end the week at 0.6639.p

  h3 idfortheaussiedollarFor the Aussie Dollarh3

  pThere were no material stats to provide the Aussie Dollar with direction.p

  pThe RBA meeting minutes failed to deliver support despite a shift in sentiment towards interest rates. Monetary policy divergence remained firmly in favor of the Greenback.p

  h3 idforthekiwidollarFor the Kiwi Dollarh3

  pIt was a quiet week, with economic data limited to Q1 inflation figures. The stats were Kiwi Dollar positive, with consumer prices rising by a further 1.8 in the quarter. Yearonyear, the annual rate of inflation held steady at 6.9, which was also Kiwi Dollar positive.p

  pThe numbers were not enough to prevent a slide, however, with the Fed likely to take a far more aggressive rate path.p

  h3 idforthejapaneseyenFor the Japanese Yenh3

  pEconomic data included industrial production, trade, and private sector PMI numbers.p

  pPositive stats were not enough to prevent a Yen return to ¥128 against the Dollar.p

  pIn February, industrial production rose by 2, with Japans trade deficit narrowing from ¥669.7bn to ¥412.4bn.p

  pAccording to April prelim figures, the manufacturing PMI slipped from 54.1 to 53.4, while the services PMI increased from 49.4 to 50.5.p

  pThe a hrefhttps:www.fxempire.comcurrenciesusdjpyJapanese Yena slid by 1.61 to end the week at ¥128.50 against the Dollar. In the week prior, the Yen ended the week down by 1.71 to ¥126.46.p

  h3 idoutofchinaOut of Chinah3

  pIt was a particularly busy week, with Q1 GDP, industrial production, and fixed asset investment figures in focus.p

  pIn Q1, the economy grew by 1.3, which was softer than 1.5 in Q2. Yearonyear, the economy grew by 4.8, picking up from 4.0 in the quarter prior.p

  pThe downward trend in industrial production continued, with production up by 5.0 yearonyear. In February, industrial production increased by 7.5.p

  pAlso negative for the markets were more stringent lockdown measures to curb the spread of the coronavirus.p

  pIn the week ending April15, the Chinese Yuan tumbled by 2.04 to CNY6.5014. The Yuan fell by 0.10 to CNY6.3715 in the week prior.p

  pThe Hang Seng Index ended the week down 4.09, with the CSI300 sliding by 4.19.p

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