For all the noise about import tariffs, Brexit and a possible end to the ECB’s quantitative easing program, major currencies were rather sedate last week with most of the action in the more volatile high-yielding emerging market currencies. The Dollar, Euro and Kiwi Dollar made small gains while Sterling and the Swiss Franc were slightly weaker and the Australian Dollar was broadly unchanged.
US Dollar
The Dollar TWI made only small gains last week thanks against to robust US macro data but this was enough to send the Dollar TWI to a one-year high.
Sterling
The TWI weakened slightly last week despite supportive comments from MPC member Ramsden but remains in the middle of a narrow multi-week range. Sterling has been buffeted by Brexit-related headlines and markets will be looking to next week’s House of Commons votes and key macro data for direction.
Euro
The Euro’s impressive recovery extended slightly last week although it lost some steam on Friday following the release of weak German export and industrial output data. Markets seem unconcerned about the potential impact of import tariffs which the US has imposed on the European Union and the key event will be next week’s ECB policy meeting.
