Markets Report - 17 April 2023

A daily breakdown of the markets for the 17th April 2023, provided to you by Sterlex.

🇪🇺💶EUR/USD consolidates intraday losses around 1.0980 as pair traders seek more clues to extend the previous day’s fall amid a sluggish Monday morning in Europe. Adding strength to the Euro pair’s recovery moves are hopes that the bloc will be able to avoid the recession. On the other hand, the market’s pricing of the ECB’s 0.25% rate hike and the policymakers’ resistance to utter policy pivot or rate cut, except Governing Council member Mario Centeno, also keeps the EUR/USD buyers hopeful. Moving on, ECB President Lagarde is scheduled to speak one more time in the day and can entertain EUR/USD traders. European Central Bank (ECB) President Christine Lagarde remained confident that inflation will gradually decline ahead. She cited that "Historically high wage growth, related to tight labor markets and compensation for high inflation, will support core inflation over the projection horizon, as it gradually returns to rates around our target,". However, major attention will be given to this week’s PMIs to reconfirm the economic recovery hopes, as well as prod the hawkish Fed bets and the latest falling prices.

🇬🇧💷The Pound Sterling is expected to remain in action ahead of the release of the United Kingdom Employment data (Mar). The pair is currently placed around the 1.2400 mark, nearly unchanged for the day, and for now, seems to have stalled its retracement slide from the highest level since June 2022 touched on Friday. Investors should be aware of the fact that factors that have been fueling inflationary pressures in the UK regions are food inflation and higher employment bills due to severe labor shortage and decelerating labor cost index will provide some relief to the Bank of England (BoE) policymakers. Continuous addition of job seekers into the labor force indicates tight labor market conditions. The GBP/USD pair kicks off the new week on a subdued note and seesaws between tepid gains/minor losses through the early part of the European session. 6.5%. Three-month Unemployment Rate is likely to remain steady at 3.7%. Apart from that, Average Earnings excluding bonuses are expected to soften to 6.2% vs. The Claimant Count Change is expected to decline by 11.8k, higher than the former release of 11.2K.

🇺🇸 🏦The US Dollar Index, which tracks the USD performance against a basket of six major currencies, extends its recovery toward 102.00 following a more-than-0.5% increase seen on Friday. In the meantime, bets on a 25 bps rate hike by the Federal Reserve at the May 3 event remain on the rise and mainly propped up by hawkish Fedspeak, while the still elevated inflation also seems to maintain the prudent stance among investors. The latest macroeconomic data releases from the United States (US) and hawkish comments from Federal Reserve (Fed) officials help the USD keep its footing. The US Dollar (USD) started the new week on a bullish note after having registered strong gains against its major rivals ahead of the weekend.