EURUSD plunged on Friday due to a broad demand for the US Dollar as falling equities and weaker US government bond yields helped support the safe-haven currency. Not helping the Euro was poor data figures; Germany and the EU reported their preliminary estimates of Q1 GDP at the end of last week, both indicating economic contraction. German’s GDP printed at -1.7% QoQ while in the EU, it resulted in-1.8%, a consequence of the COVID-19 lockdowns and restrictions. From across the pond, US Price Index rose to 1.8% YoY in March from 1.4% in February as forecasted. The University of Michigan's Consumer Sentiment Index also improved to 88.3 in April from 84.9 in March – positive signs that the US economy is recovering as hoped.
GBPUSD also struggled on Friday as the pair lost ~150 pips in the session. As has been the case of late, this move is due to Dollar strength. One economist noted that “investors rushed into the greenback as stocks turned south, with Wall Street posting substantial losses despite generally encouraging US data. There was not a clear catalyst for the sudden dismal mood that sent US equities lower and the greenback higher, although concerns about the effectiveness of coronavirus vaccines on new variants weighed on sentiment. Month-end flows exacerbated the dollar’s advance”.
Cable opened at 1.3935 on Friday, but quickly fell below that handle, closing the week at 1.3844. In regard to GBPUSD short-term outlook, some say the pair “is at risk of falling further according to the daily chart, as technical indicators turned firmly lower.”
GBPEUR also made a loss to finish the week. The pair opened at 1.1500 and closed at 1.1499.
EURUSD started the day comfortably at 1.2117, but due to mounting pressure from the Greenback, closed the week at 1.2038.
