By Enrique Diaz-Alvarez, Chief Financial Risk Officer of International Payment Company Ebury

A week of relative tranquility in currency markets was slowly disturbed on Good Friday by a new round which came from the social media of the US president.

Trump launched a series of personal attacks on Fed President, Powelland one of his main advisor has confirmed that Trump is considering his removal, though whether this is legal remains unclear. Powell said he did not think Trump has such a right. However, this new attack on US institutions further upset their investorswho again began to they sell at the same time US shares, bonds and dollar From Sunday night, an extremely unusual and worrying market move.

The degree to which markets can focus on anything other than the unpredictable explosions of Trump this week is unclear. However, in addition to the sudden messages about duties, monetary policy and more, this week we will have the first assessment of the damage caused to business confidence by unstable Trump policies. Today, April PMI reports are published by all the main economic sectors of the world, enabling us to evaluate the impact, both in absolute and comparative sizes. In terms of real financial data, these will be a little longer, except for the weekly US unemployment applications, which are now more important.

Sterling

OR sterling reinforced against the dollar almost at the same wavelength as the euro last week, as markets had difficulty discriminating in the midst of chaos in the US. Last week’s significant but late data included reports on the labor market and March inflation. The former continues to remain steady, with continuous job creation and satisfactory but restrained wage increases. For inflation, the news was positive for the Bank of England, as the March Consumer Price Index (CPI) was lower than forecasts, paving the way for interest rates in May. We believe that the pound is in good position to benefit from the volatility of markets, given its relatively low exposure to US duties, durable demand and the prospect of an EU.

Euro

The euro was reinforced Along with all the main coins (G10), suggesting that last week the traffic was more “sale of the dollar” than “euro market”. However, after the “Liberation Day”, the euro is the currency with the best performance among the main currencies, except for the Swiss franc, suggesting that Eurozone markets absorb a significant portion of US -leaving capital. The fact that the common currency continues to be reinforced, despite the relatively mild ECB meeting last week, confirms this trend. Purchases are now pricing at a final interest rate of 1.5% or lower, but foreign exchange markets do not seem to be worried about the low interest rate in exchange for the relative institutional stability of the eurozone.

Dollar

The only macroeconomic information we have received so far, and which reflect the mess and unrest followed by ‘day of liberation“They are from research. They all sketch a uniformly ominous image. Consumers and producers are concerned about higher prices due to duties, with the latter suspending their investment plans amid uncertainty. This is noteworthy, as US -based producers are the intended beneficiaries of tariff policies. However, the only reliable real economic element is weekly unemployment applications, which have not yet increased, suggesting that this uncertainty has not yet led to mass redundancies. This week we will have additional April data: Weekly Unemployment Applications and further Fed regional surveys. To the extent that markets can turn their attention to anything other than Trump’s explosions, these elements will be the focus of the week.