EUR Rises Despite Weak Data: Oil Drops Further
Markets start the week reacting to a string of light figures out of the Eurozone and continued weakness in global commodity markets. German industrial production fell sharply in February, and Eurozone retail sales growth missed expectations, reinforcing concerns about sluggish consumer and manufacturing activity. Meanwhile, crude oil prices are down over 15% in a week, and gold is retreating from recent highs. Currency markets show mixed performance, with the U.S. dollar weaker against the euro but stronger against risk-linked and commodity currencies.
Key Data – Monday, April 7
Canada:
The Bank of Canada Business Outlook Survey is due this afternoon and will offer insight into business confidence ahead of next week’s rate decision.
Germany Industrial Production (Feb):
MoM fell 1.3% (vs -1.1% expected), YoY output dropped 4.0%, highlighting continued weakness in Europe’s largest economy.
Trade surplus slightly missed, at €17.7B vs €17.8B consensus.
Eurozone Retail Sales (Feb):
MoM growth of 0.3%, missing the 0.5% forecast.
YoY retail sales rose 1.8%, slightly better than January’s 1.5%, but the monthly miss suggests fragile consumer momentum.
Sentix Investor Confidence (April):
Awaiting release, previous reading was -2.9. A deeper decline could add pressure on the euro.
ECB Watch:
ECB’s Cipollone speaks at 09:45 GMT. Traders will watch for any dovish tilt following softer growth signals across the bloc.
Commodities
- Oil:
- WTI: $60.37 (-2.61% today, -15.74% weekly)
- Brent: $63.92 (-2.53%)
Crude prices continue to slump on weakening global demand signals, high inventories, and fading geopolitical risk premiums. Both benchmarks are down over 30% YoY.
- Gold:
- $3,021.92 (-0.50%)
Gold remains elevated but has eased as yields stabilize and traders lock in profits following its recent run.
- $3,021.92 (-0.50%)
- Silver:
- $29.83 (+0.87%)
Silver is rebounding after a steep sell-off last week, though it remains down nearly 7% month-to-date.
- $29.83 (+0.87%)
Currency Movements
- EUR/USD – The euro to U.S. dollar exchange rate has pushed higher to 1.1015, gaining 0.57%. Despite weak data, the EUR/USD pair is benefiting from broader dollar softness and a pullback in U.S. yields.
- GBP/USD – The British pound is trading slightly higher at 1.2914 (+0.23%). The GBP/USD exchange rate is holding steady as markets look ahead to upcoming UK growth and inflation figures.
- AUD/USD – The Australian dollar is under pressure, trading at 0.6011, down 0.47%. The AUD/USD pair is weighed by commodity weakness and growing concerns about Chinese demand.
- NZD/USD – The New Zealand dollar is also sliding, with NZD/USD down 0.65% at 0.5561. Risk-off flows and poor performance in metals and energy are dragging the kiwi lower.
- USD/JPY – The U.S. dollar to Japanese yen rate is down 0.88% to 145.66, as the yen strengthens on lower U.S. yields and safe-haven demand. USD/JPY has now dropped nearly 7.5% YTD.
- USD/CNY – Trading at 7.3200, the USD/CNY rate is up 0.32%, reflecting persistent pressure on the yuan amid weak Chinese data and dollar demand in Asia.
- USD/CHF – The U.S. dollar to Swiss franc exchange rate has dropped to 0.8503 (-1.18%). The USD/CHF paircontinues to slide as the franc gains on risk aversion and weaker U.S. rate outlooks.
- USD/CAD – The U.S. dollar is slightly higher against the loonie at 1.4232 (+0.13%). The USD/CAD pair remains supported by falling oil prices and cautious sentiment ahead of Canadian business confidence data.
- USD/MXN – The U.S. dollar to Mexican peso exchange rate is rising sharply, up 1.38% to 20.71. A combination of falling oil prices and emerging market outflows is putting pressure on the MXN.
- USD/INR – Trading flat at 85.52, the USD/INR pair remains stable, with the rupee supported by inward flows and resilient domestic data.
Market Outlook
Traders are starting the week cautious, responding to weaker Eurozone production and retail data, while also digesting last week’s U.S. jobs numbers. Falling oil and metal prices are driving risk-off sentiment, especially in commodity-linked currencies and emerging markets.
Focus will shift later in the week to U.S. inflation data and Fed speakers for fresh policy signals. Until then, sentiment may remain defensive, with pressure on the dollar in major pairs but strength versus higher-beta and EM currencies.