May 2020 Currency outlook - Market insight into global currencies
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
USD
CAD
GBP
EUR
CHF
May 2020 PLN
CZK
Currency outlook AUD
Market insight into global currencies
JPY
CNY
NZD
SGD
MXNUSD
USD
By Joe Manimbo, Currency Strategist – North America
CAD
May events April review May risk events and key themes GBP
A dire growth warning from the IMF helped the U.S. dollar The U.S. currency’s immediate prospects appear solid with
01 ISM index extend its 2020 winning streak. The greenback held aloft near the drumbeat of dismal global data likely to grow louder in
Fri
the previous month’s multiyear highs after the global lender the weeks ahead. Still, the dollar would be at risk of losing
EUR
05 Trade balance
forecast the world economy could contract about 3% in 2020 safe haven support once major economies show signs of
Tue and likely endure its worst year since the Great Depression normalizing after the devasting pandemic. The battle of
in the 1930s. The IMF’s bleak assessment was validated by opinion between hopes of a V- or U-shaped recovery should
08 Nonfarm payrolls shockingly awful data from the U.S., China and Europe. serve as a key litmus test of dollar sentiment. The longer the CHF
Fri road to economic recovery, the better haven assets like the
y China’s economy shrank 6.8% in the first quarter, its first
dollar should fare.
12 contraction in decades.
Tue
CPI
y Recession fears flared in Europe following record weak
y Politicians face a daunting task of deciding when to reopen PLN
shuttered businesses. Normalizing too soon would risk
business surveys.
15 Retail sales another wave of infections.
Fri y The surge in U.S. unemployment to 4.4% from 3.5% marked
the biggest one-month spike in 45 years.
y Markets are braced for America’s April jobs report on
May 8 which could see unemployment test fresh record
CZK
20 FOMC minutes highs above 10%.
Wed Source: Reuters, 2018
y The broadly weighted dollar index has appreciated around
26 New home sales 4% so far in 2020. AUD
Tue
28
Thu
Q1 GDP rev.
JPY
Economic data EUR/USD (12 months) CNY
1.15
Base Rate: 0-0.25%
GDP: 2.1%
1.12
NZD
Inflation: 1.8%
Unemployment: 4.4%
1.09
SGD
Trade Balance: -$39.9 Bn 1.06
M J J A S O N D J F M A
MXNCAD
USD
By Joe Manimbo, Currency Strategist – North America
CAD
May events April review May risk events and key themes GBP
Canada’s dollar stabilized above four-year lows but remained in Things could get worse for the loonie before they get
05 Trade balance a sizable hole for the year. The currency battled stiff headwinds meaningfully better. Market eyes will be fixated on Canada’s
Tue
in the form of subzero oil prices and a record loss of a million economy, oil markets and coronavirus developments. Should
EUR
07 Ivey PMI
Canadian jobs in March. Despite such formidable downside the next Canadian employment report, due May 8, show
Thu risks, the so-called loonie, whose nickname comes from the more record weakness, it could compel central bankers to use
bird on the back of the one dollar coin, erased some of its more of their dwindling tools to boost growth. Until oil shows
08 Employment losses on hopes that policymakers would take bolder action to convincing signs of bottoming, the path of least resistance CHF
Fri help shore up oil markets and Canada’s sagging economy. could be lower for the loonie.
14 y Bearish dynamics of oversupply and scarce demand y Canadian inflation fell to 5-year lows below 1%, underscoring
Thu
Manufacturing sales
and storage space conspired to push the price of U.S. oil economic vulnerabilities even before the coronavirus. PLN
below zero. y As a leading energy exporter, Canada’s dollar often trades
20 CPI y Canada shed more than one million jobs in March – in near lockstep with oil markets.
Wed
a record amount that pointed to the nation’s economy in y USD/CAD was little changed in April but still around 8% CZK
22 Retail sales
an unprecedented recession. stronger for the year.
Fri
y Pressure mounted on OPEC to cut production further to try
28 Q1 Current account
to offset diminishing demand due to the coronavirus.
AUD
Thu
29
Fri
Q1 GDP
JPY
Economic data USD/CAD (12 months) CNY
1.46
Base Rate: 0.25%
GDP: 0.3%
1.40
NZD
Inflation: 0.9%
Unemployment: 7.8%
1.34
SGD
Trade Balance: -C$0.98 Bn 1.28
M J J A S O N D J F M A
MXNGBP
USD
By George Vessey, Currency Analyst – United Kingdom
CAD
May events April review May risk events and key themes GBP
Coronavirus concerns continue to grip financial markets as The correlation between market risk aversion and sterling
07 BOE rate decision +
lockdown measures across the globe crush economic activity. April weakness suggests if deep and long recession risks continue to
Thu updated forecasts
increase, the pound may be sold alongside other riskier assets.
is usually a positive month for GBP/USD but fresh risk aversion,
as a result of wild swings in oil prices, sent sterling tumbling lower. Oxford Economics forecast UK GDP to fall by 5% in 2020 as a EUR
11 UK-EU trade talks Souring sterling sentiment was compounded by dismal economic whole and unemployment will rise at a faster rate than during
Mon
data - including an increase in the unemployment rate and the global financial crisis. Moreover, inflation is expected to drop
13 Q1 GDP
surge in universal credit claims. The UK government and Bank of towards zero partly as a result of the plunge in oil prices. Unless
there is a clear signal that the pandemic is peaking in the UK and
CHF
Wed England have taken unprecedented action in trying to limit the
lockdown measures are eased, the downside risks may outweigh
economic impact of the lockdown with the hope that activity can
upside potential for the pound. The outlook remains very uncertain
19 restart quickly once restrictions are eased.Despite the supportive
Tue
Average earnings
measures by governments and central banks globally, market
for economies worldwide and social distancing measures are likely
to stay in place due to fears of a second wave of infection.
PLN
volatility and illiquidity saw daily price swings of 3%-5% even in
20 Inflation (CPI) GBP/USD, one of the most liquid currency pairs in the world. y Quantifying the likely impact on economic activity remains
Wed a challenge, but this month should provide a better
y Demand for the pound ran out of steam as GBP/USD
reflection of the state of economies worldwide, making CZK
21 Flash PMIs
breached $1.26 and GBP/EUR €1.15 and both currency pairs macroeconomic data releases even more important.
Thu reversed course later in the month. Source: Reuters, 2018
y The Bank of England will release its monetary policy report,
22 Retail sales
y UK-EU trade talks restarted after the coronavirus-induced
interruption, exposing renewed fears of a no-trade-deal scenario
offering new forward guidance on monetary policy and
updated economic forecasts.
AUD
Fri
come end of year, which would weigh heavily on the pound.
y GBP/USD may continue to fluctuate between $1.20 and
29 y UK PM Boris Johnson recovered from the virus after being $1.25 for the next month or so and GBP/EUR may stabilise
Fri
Consumer confidence
admitted to intensive care earlier in the month. between €1.12 and €1.14. JPY
Economic data GBP/USD (12 months) CNY
1.34
Base Rate: 0.1%
GDP: 1.1%
1.30
NZD
1.26
Inflation: 1.7%
1.22
Unemployment: 4.0%
1.18
SGD
Trade Balance: -£2.8 Bn 1.14
M J J A S O N D J F M A
MXNEUR
USD
By Guillaume Dejean, Currency Strategist – Europe, Middle East, Africa
CAD
May events April review May risk events and key themes GBP
With markets fueled by high demand safe have assets How will the euro lure investors away from US dollar?
03 Start of the lift of
investors globally shied away from the Euro. Economic Successfully winding back lockdowns will be key. The stakes
Sun lockdown in Italy
data released in March confirmed the negative impact of are double here: to avoid a second wave of contamination
EUR
06 Final Composite PMI nationwide lockdown policies and how difficult it could be and ensure a quick and safe return to work. Failure to meet
Wed (April) for the area to get back to the normal. Signs of political these conditions would anchor the euro at a low level, and
divergences among European leaders about economic potentially instigate decline toward its annual low of $1.06 (or
08 Moody’s credit ratings stimulus packages for EU countries hit hardest by the outbreak beyond). The ability of European leaders to find a coronavirus CHF
Fri on Italy & Greece added to distrust towards the euro. bail-out deal will also have a significant influence in the
trajectory of the euro this month.
15 Flash Q1 GDP in y The IMF suggests the Eurozone could suffer a -7.5%
Fri Germany contraction this year, the largest decline among the most y With a downgraded economic outlook impacting the euro’s PLN
developed economies. value, political tensions in the area would push markets ever
15 Fitch’s credit rating on
y European countries are deeply divided on the project of further away from the currency.
Fri France
mutualizing debts and issuing a European bond (corona y A potential credit rating downgrade for some major CZK
18 Eurogroup meeting
bond) to raise money on capital markets. European countries (France and Italy) could trigger tensions
Mon
y The EUR/USD rate moved sideways over a large part of the across bonds markets and put downside pressure on the euro. Source: Reuters, 2018
22 Flash PMI
month in a narrow corridor of $1.08-$1.10. y If global concerns about Covid-19 start to ease the euro
could rally of Euro above $1.10, however any upsides would
AUD
Fri
be capped Europe’s cloudy outlook.
29
Fri
Flash inflation
JPY
Economic data GBP/EUR (12 months) CNY
1.21
Base Rate: 0.0%
GDP (annual growth): 1.0% 1.17 NZD
Inflation (annual growth): 0.7% 1.13
Unemployment: 7.3% 1.09 SGD
Trade Balance: -€23.0 Bn 1.05
M J J A S O N D J F M A
MXNCHF
USD
By Adam Ma, Currency Strategist – United Kingdom
CAD
May events April review May risk events and key themes GBP
Risk off sentiment has been the theme for April with safe The Swiss government is looking at a 3 stage exit from the
04 Manufacturing PMI haven buying the common trade. As a result, the Swiss Franc current lock down to lift coronavirus restrictions. If all goes
Mon
hit new 5-year highs against the euro. Volatile swings in oil according to plan the nation will be re-opened by the 8th of
EUR
05 CPI
markets added new pressures to the negative outlook on the June. The shutdown of the economy is forecast to cost SFr5
Tue global economy prompting further flights to safety. The Swiss billion a week. However, despite the negative outlook of the
National Bank (SNB) has reportedly seen SFr17.1 billion wiped economy the franc’s demand could remain high if the global
07 Forex Reserves off its foreign stocks and bonds due to the appreciation. outlook remains negative. CHF
Thu
y New economic forecasts indicate that the Swiss y EUR/CHF could continue its downward trend with the SFr1.04
08 Government expects the economy to shrink 6.7% in 2020. an area of potential support, beyond that the pair could
Fri
Unemployment rate
y GBP/CHF has risen close to 2.5% in April and over 8.55 since become vulnerable to further downside moves. PLN
the lows of March, currently trading at SFr1.20.
29 KOF indicator
Fri
CZK
Source: Reuters, 2018
AUD
JPY
Economic data USD/CHF (12 months) CNY
1.03
Base Rate: -0.75%
GDP: 1.5% 1.00 NZD
Inflation: -0.1% 0.97
Unemployment: 2.8% 0.94 SGD
Trade Balance: – 0.91
M J J A S O N D J F M A
MXNPLN
USD
By Boris Kovacevic, Currency Strategist – Central and Eastern Europe
CAD
May events April review May risk events and key themes GBP
Concerns about the first attempts to reopen the European May delivers the final data points of 2020’s first quarter and
04 Markit PMI economies and volatile commodity trading have limited the will likely determine the impact of the ongoing Covid-19 crisis
Mon
potential for significant recoveries of the Polish zloty. The first
marginal monthly appreciation of the currency against the euro
and the global economic downtrend. The Polish Central Bank
EUR
06 NBP interest rate since the beginning of the year still seems to suggest some easing
will take the lead. New insights may be uncovered in the bank’s
Wed current assessment of the domestic economy with money
of global tensions. Against the background of recent economic
markets pricing in a 54% chance of the first rate cut within two
15 GDP Flash Q1
forecasts of the International Monetary Fund, showing the Polish
economy could contract by 4.6% in 2020, government officials and
months. The Zloty is still quite sensitive to global headlines and CHF
Fri developments regarding the spread of the coronavirus and
the central bank have collectively taken an expansionary stance.
could come under pressure if first quarter growth estimates for
18 Corporate sector y The central bank has followed its first emergency rate cut
Mon wages in March with an additional cut, slashing interest rates to a the Eurozone paint a pessimistic picture about the health of
the regional and global economy.
PLN
record-low at 0.5%. The NBP launched its first open-ended
18 Net Inflation
quantitative easing program that could amount to around y Recently improved US-China relations failed to manifest in a
Mon 8% of GDP, as first calculations suggest.
partial trade deal. This could cause an end-of-year sell-off,
y Industrial production fell by 2.3% year-on-year in March, which could result in a depreciation of the Polish currency. CZK
18 Industrial output the first contraction in seven months. High frequency data
Mon suggests that the economic impact of the current lockdown y Looking at domestic data releases, corporate sector wages Source: Reuters, 2018
and industrial output will be closely watched, given the
21 Retail sales
is still not appearing in the recent data points.
y EUR/PLN is currently enjoying some buying support in the
newly found weakness of the latest data points. AUD
Thu
region of 4,51 zł. A fall below could open the potential for
29 depreciation to 4,48 zł. On the upside, 4,64 zł could come
Fri
CPI
into play, if risk-off flows start to reappear. JPY
29 GDP Preliminary
Fri
Economic data USD/PLN (12 months) CNY
4.30
Base Rate: 0.5%
GDP: 3.1%
4.10
NZD
Inflation: 4.6%
Unemployment: 5.5%
3.90
SGD
Trade Balance: – 3.70
M J J A S O N D J F M A
MXNCZK
USD
By Boris Kovacevic, Currency Strategist – Central and Eastern Europe
CAD
May events April review May risk events and key themes GBP
The Covid-19 crisis and induced risk-off sentiment have become The Czech government has extended some of its emergency
04 Markit PMI the key market mover in Central Europe. This has largely measures to support small and medium businesses during the
Mon overshadowed domestic political and economic developments, economic fallout. The recent Government bond auctions have
especially with no central bank meeting held in the last four seen strong demand, suggesting that debt issuance has not yet EUR
06 Retail sales weeks. After cutting the interest rate from a ten‑year high at reached its ceiling. The humanitarian and economic impact of
Wed 2.25% to 1% in March, monetary policy has taken a backseat in Covid-19 crisis will remain key drivers of the Czech Crown in May.
April. Recent economic data releases have been more resilient Market focus will nonetheless shift to regional economic data
07 Industrial output
to external turmoil’s than previously expected and capital
outflows have started to normalize again, helping the Czech
like the release of the first quarter Czech GDP and the central CHF
Thu bank decision early May. In recent days, the global currency
crown to stabilize around EUR/CZK 25.40.
markets have again dominated the shift to safe currencies,
07 y The International Monetary Fund has downgraded the outlook from which the US dollar and the Swiss franc can benefit.
Thu
FX Reserves
for the Czech Republic and is currently expecting an economic
y Recent statements made by two Czech central bankers,
PLN
contraction of 6.5%. The current data is still coming in with a lag
Vojtech Benda and Tomas Holub suggest that the CNB
07 CNB interest and is unable to show the effects of the recent lockdown measures.
is still not rushing into deploying the quantitative easing
Thu rate decision y The Czech labour market has stagnated in March at around 3%,
defying the expectations for a slight uptick in unemployment.
program. Especially given the room for further rate cuts,
that are pricing in by money markets.
CZK
12 Unemployment rate The Consumer Price Index has slightly decreased in line
Tue with the recent drop in oil prices. Inflation has grown by an y Second order economic releases like the purchasing Source: Reuters, 2018
annualized basis of 3.4%, down from 3.7% a month before. manager index for the manufacturing sector, retail sales
13 CPI y EUR/CZK has appreciated around 9% in the last three months,
and FX reserves could be seen as leading indicators to AUD
Wed gauge the recent economic damage.
the best streak since the financial crisis in 2008. The currency pair
has encountered some resistance at 28,00. Recovery attempts y Recovery attempts coming from the Czech crown would only
15
Fri
Preliminary GDP Q1 from the Crown could come under pressure at EUR/CZK 26,90,
given that the Euro has enjoyed some support at these levels.
be visibly under the assumption of decreasing uncertainties
and first signs of successful reopening of European economies. JPY
Economic data USD/CZK (12 months) CNY
26.0
Base Rate: 1.0%
GDP: 3.1% 25.0 NZD
Inflation: 3.4% 24.0
Unemployment: 3.0% 23.0 SGD
Trade Balance: – 22.0
M J J A S O N D J F M A
MXNAUD
USD
By Steven Dooley, Currency Strategist – Asia Pacific
CAD
May events April review May risk events and key themes GBP
The Australian dollar bounced back strongly in April, boosted The Australian dollar is likely to be driven by news around
04 Retail sales by a large jump in global equity markets with the US’s Dow coronavirus and its economic impact in the near future.
Mon
Jones jumping more than 30% in less than four weeks. The Reserve Bank of Australia held steady this month after it EUR
05 RBA decision The Australian dollar, with its key exposure to commodity cut rates twice in March to a new all-time low of 0.25%. The RBA
Tue exports, is closely tied to global risk sentiment. also launched a historic quantitative easing program.
07 Trade balance
y The Aussie was helped by retail sales up 8.2% in March y The Aussie faces some tougher data after an update from CHF
Thu versus 0.5% in February in preliminary numbers. The the Australian Bureau of Statistics found 800,000 jobs have
numbers were driven by last month’s panic buying, with been lost in the three weeks to 4 April.
18 supermarkets sales up an incredible 22%.
Mon
RBA minutes
y Australian employment was better than expected with a 6k
PLN
21 Employment
gain in jobs defying expectations for 40k fall.
Thu
CZK
22 Retail sales
Fri Source: Reuters, 2018
AUD
JPY
Economic data AUD/USD (12 months) CNY
0.72
Base Rate: 0.25%
GDP: 2.2%
0.69
NZD
0.66
Inflation: 1.8%
0.63
Unemployment: 5.2%
0.60
SGD
Trade Balance: AUD4.4 Bn 0.57
M J J A S O N D J F M A
MXNJPY
USD
By Guillaume Dejean, Currency Strategist – Europe, Middle East, Africa
CAD
May events April review May risk events and key themes GBP
End of the first JPY started the month on the wrong foot as market volatility The trajectory of the Yen will depend on two things: the spread
06 lockdown period in temporarily dropped and the coronavirus made an of Covid-19 across the globe, and how quickly the global
Wed
Japan unexpected return in Japan. Despite a significant ‘recovery’
rally in stock exchanges worldwide, the global appetite for
lockdown policies are lifted. Without evidence that the virus
is under control and the economy back on track markets
EUR
Summary of opinion risks remains low. Turmoil across oil markets combined with can expect volatility and for decisions to remain tinged
12 of the BOJ April growing concern about the economic impact of Covid-19 with risk-aversion. The Yen will continue following investor
CHF
Tue
meeting underpinned strong market demand for safe haven assets sentiment, strengthening when the global outlook is shaky and
such the Japanese yen. weakening when there is appetite for risk.
18 Flash Q1 GDP
Mon y Japan suffered a second wave of Covid-19 cases forcing the y The Yen will be sensitive to any unconventional spike of
government to declare a state of emergency in some areas volatility across financial markets. PLN
21 Trade balance for at least one month. y A global easing of lockdown policies could help correct
Thu
y The drop of US oil prices into negative territory triggered a the Yen.
21
Thu
Flash manufacturing
PMI
new wave of panic across financial markets in the second
half of April.
y An acceleration of the Covid-19 outbreak in Japan could CZK
have downside side effects on the currency (especially
y The currency faced off against the dollar (¥107-¥108), against USD). Source: Reuters, 2018
22 Inflation
Fri resisted the UK pound comeback (¥132-¥134) and headed
toward its annual high against the euro (¥116-¥117).
AUD
29 Unemployment rate
Fri
JPY
29 Industrial production
Fri
Economic data GBP/JPY (12 months) CNY
150
Base Rate: -0.1%
GDP (annual growth): -0.7%
145
NZD
140
Inflation (annual growth): 0.4%
135
Unemployment: 2.4%
130
SGD
Trade Balance: ¥4.95 Bn 125
M J J A S O N D J F M A
MXNCNY
USD
By Steven Dooley, Currency Strategist – Asia Pacific
CAD
May events April review May risk events and key themes GBP
The Chinese yuan fell back towards 12-year lows last month The Peoples Bank of China continued to provide support to the
04 Caixin Manufacturing
as the ongoing impact of COVID-19 hit global growth economy as it lowered its monthly loan prime rate.
Mon PMI
expectations. The PBOC cut the one-year rate from 4.05% to 3.85%. EUR
06 Caixin Services PMI The weakness came despite China’s move back to a more y China will be closely watched as one of the first countries to
Wed normalised state as the country returned from its medical exit their lockdown.
08 Trade balance
lockdown.
y The CNY might remain beholden to global, rather than CHF
Fri y First-quarter GDP showed a large fall with growth down local, growth dynamics.
6.8% in annualised terms.
12
Tue
CPI y Other data was also negative with fixed asset investment
down 16.1% in March and retail sales down 15.8%.
PLN
15 Industrial production
Fri
CZK
15 Retail sales
Fri Source: Reuters, 2018
30 Manufacturing index AUD
Sat
JPY
Economic data USD/CNY (12 months) CNY
7.20
Base Rate: 3.85%
GDP: -6.8%
7.10
NZD
7.00
Inflation: 4.3%
6.90
Unemployment: 3.7%
6.80
SGD
Trade Balance: USD 19.9 Bn 6.70
M J J A S O N D J F M A
MXNNZD
USD
By Steven Dooley, Currency Strategist – Asia Pacific
CAD
May events April review May risk events and key themes GBP
The New Zealand dollar rebounded in April after falling to The coronavirus outlook seems brighter in New Zealand
06 Dairy prices decade lows versus a range of currencies in March. than in other parts of the world with NZ exiting stage four
Wed
The sharp shock to global growth caused by the impact of restrictions on 27 April.
EUR
07 Unemployment government-mandated shutdowns pressured the currency. However, with the currency closely tied to global growth
Thu expectations, local news is unlikely to be the major driver of
However, the big jump in global equity markets, with the US’s
13 RBNZ announcement
Dow Jones up as much as 32% from the lows in mid-April, the NZD’s performance.
CHF
Wed boosted the currency. y In terms of data, a jump in inflation was overlooked with
y The NZDUSD jumped almost 12% over the four-weeks to the collapse in local demand likely to drive deflation in
15 the future.
Fri
Manufacturing index mid-April but only recovered to levels seen in mid-March.
y The RBNZ next meets on 13 May, but after slashing rates to
PLN
y The NZD’s best gains were versus the euro as poor data
20 Dairy prices pressured the single currency. 0.25% and starting quantitative easing in March, we might
Wed not see anything major in the near term.
CZK
Source: Reuters, 2018
AUD
JPY
Economic data NZD/USD (12 months) CNY
0.71
Base Rate: 0.25%
GDP: 2.3%
0.68
NZD
0.65
Inflation: 2.5%
0.62
Unemployment: 4.0%
0.59
SGD
Trade Balance: NZD 590 M 0.56
M J J A S O N D J F M A
MXNSGD
USD
By Steven Dooley, Currency Strategist – Asia Pacific
CAD
May events April review May risk events and key themes GBP
The USDSGD fell from ten-year highs last month as a sharp The SGD was initially weaker as Singapore’s central bank,
04 Manufacturing PMI rebound in global shares caused the USD to weaken. the Monetary Authority of Singapore said it had moved its
Mon
The SGD benefited due to its close exposure to global trade currency controls to a neutral stance.
EUR
05 Retail sales expectations. This follows a move to reduce the rate of appreciation in
Tue October 2019.
y The Singapore dollar was pressured by the falling oil price.
18 Exports
More than 5% of Singapore’s GDP is driven by oil refining The MAS, unusually, manages monetary policy via the CHF
Mon and exports. Singapore dollar’s valuation.
y Oil prices plunged below zero for the first time ever last y The USDSGD is likely to be driven by global growth
26
Tue
CPI month. The massive fall in demand, sparked by reduced
economic activity to contain COVID-19, along with increased
expectations especially through the lens of COVID-19.
PLN
y The Reuters 12-month consensus forecast, as reported on
26 Manufacturing supply due to a dispute between Russia and Saudi Arabia, 2 April 2020, is 1.4100.
Tue output produced the conditions.
CZK
Source: Reuters, 2018
AUD
JPY
Economic data USD/SGD (12 months) CNY
1.46
SIBOR: 1.08%
GDP: 1.0% 1.43 NZD
Inflation: -0.2% 1.40
Unemployment: 2.2% 1.37 SGD
Trade Balance: SGD 12.1 Bn 1.34
M J J A S O N D J F M A
MXNMXN
USD
By Joe Manimbo, Currency Strategist – North America
CAD
May events April review May risk events and key themes GBP
Mexico’s peso plumbed record lows for the second straight Emerging markets will look to global developments related
04 Manufacturing PMI month. Emerging markets kept under significant pressure as to the pandemic for their primary steer. The relaxation of
Mon
data started to show the devasting blow to the world economy lockdown measures would be an early sign of victory in the
EUR
07 Consumer confidence
from the coronavirus pandemic. Adding to the bearish battle to contain the coronavirus. Material improvement for
Thu backdrop for emerging markets, the IMF expects growth over global markets, oil in particular, appears to be a prerequisite
the coming year to be the worst since the Great Depression in for emerging markets to stage a sustained comeback.
12 Industrial output the 1930s. The peso and other oil-exposed currencies suffered y Upside for emerging markets appears limited with coming
CHF
Tue after the price of U.S. crude plunged below zero. data likely to highlight the extent to which the coronavirus
14 Interest rate y China’s economy shrank 6.8% in the first quarter, its first has damaged global growth.
Thu announcement contraction in decades. y Oil remained around historically low levels after sinking PLN
y The IMF expects global growth to contract by 3% in 2020, below zero in April.
22 Retail sales the weakest since the Depression.
Fri y As one of the year’s worst-performing currencies, the peso
y Mexico cut interest rates again in April, a bold 50 basis has depreciated by nearly 30% this year. CZK
25 Trade balance point reduction to 6.0%.
Mon Source: Reuters, 2018
26 Q1 GDP AUD
Tue
27
Wed
Jobless rate
JPY
Economic data USD/MXN (12 months) CNY
26.0
Base rate: 6.5%
GDP: -0.1% 24.0 NZD
Inflation: 3.7% 22.0
Unemployment: 3.8% 20.0 SGD
Trade Balance: 1.94 Bn 18.0
M J J A S O N D J F M A
MXNDon’t let the currency
market detract from
your bottom line.
©2020 Western Union Holdings Inc. All rights reserved.
Western Union Business Solutions is a business unit of The Western Union Company. Western Union Business Solutions operates in Japan through Western Union Business Solutions Japan KK (“WUBSKK”).
Western Union Business Solutions (Australia) Pty Limited (“WUBSA”) provides foreign exchange and payment services to Rakuten Bank, Ltd (“Rakuten”), with support services offered by WUBSKK. WUBSA &
WUBSKK together are henceforth referred to as “WUBS”.
Rakuten may offer equivalent foreign exchange and payment services to its customers (however any such customers do not become clients of WUBS by utilizing Rakuten’s services). WUBS has granted
Rakuten permission to share this Monthly Currency Outlook with its customers who may have a genuine business need for the information contained herein on the basis that any recipient of this
communication acknowledges and agrees that the Monthly Currency Outlook has been prepared for general informational purposes only and does not in any way create any liabilities or binding
obligations on WUBS. Whilst the information has been prepared with due care, WUBS makes no guarantees as to its accuracy. Rakuten customers should make their own independent enquiries before
acting on any of the information contained herein. The relationship between WUBS and Rakuten is governed by contract. There is no contractual relationship between WUBS and the customers of Rakuten.
494168974-2020-05You can also read
