G10 FX Week Ahead: Clearing The Blocks

10 and 20 us dollar bill

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The block in the Suez Canal (helping crude ahead of Thursday’s OPEC+ meeting) and the EU's struggles to find a way out of a high-contagion/low-vaccination situation will remain in focus next week. There are few signs that the USD corrective rally is over and strong payrolls, paired with Biden’s infra stimulus plans, may keep EUR/USD under pressure

USD: Building Back Better?



Week ahead bias Range next week 1 month target



Mildly Bullish 92.4000 - 93.2000 92.0000

Ending the week, there are very few signs yet that what we see as a corrective dollar bounce has run its course. On the agenda next week are a few inputs which, on paper, look dollar positive.

The first is the US macro data where the March employment numbers (ADP on Wednesday and NFP on Friday) should be strong. Our man in NYC, James Knightley, forecasts NFP to rise 750 thousand versus consensus 600 thousand. The unemployment rate is also expected to dip to 5.9/6.0% from 6.2%.

None of this should really sway the Fed, however, which still awaits 10 million people to re-discover work and has gone out of its way to undermine the unemployment rate as a catch-all figure for those unemployed.  

The second key input will be Joe Biden’s launch of his $3 trillion infrastructure plan. James Knightley thinks this will be a tougher sell than the $1.9 trillion stimulus. It will also be interesting to see how the market reacts to any suggestions of tax hikes for corporates, the wealthy, and perhaps a Capital Gains Tax hike, too.

We are still holding onto a bearish dollar scenario for later in the year, but we probably need to see bond markets settle down and Europe start to play its part in the global recovery before the dollar starts to soften again.

EUR: Early Bird Discounted EUR



Week ahead bias Range next week 1 month target



Mildly Bearish 1.1700 - 1.1870 1.1800

Europe’s clocks go forward an hour this Sunday and Friday, April 2 also represents the start of Easter holidays for much of Europe. It has been a long quarter and many will be looking to get to Friday in one piece.

As above, there are few signs yet that the dollar correction is over – that leaves EUR/USD vulnerable to 1.1700 in the week ahead. Much focus will remain on the virus situation in Europe and whether lockdowns can slow rising case numbers, and also whether the slow pace of vaccinations can finally reach exit speed.  

The data calendar this week should see a mild pick-up in the pace of Eurozone CPI in March, although nothing to bother the ECB. We should also see more readings of consumer and business confidence across the region. These have held up well so far, although these have been largely taken before fresh lockdowns and also before Europe’s most recent challenge – the Suez blockage – which could start to weigh on Europe’s industrial sector should it not be resolved quickly.

Quarter end will also see focus on portfolio re-balancing flows. Q1 European outperformance of the US both in terms of equity and bond markets could actually trigger some EUR selling on March 30 or March 31.

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Disclosure: This publication has been prepared by the Economic and Financial Analysis Division of ING Bank N.V. (“ING”) solely for information purposes without regard to any ...

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