FX Flows Quiet After a Very Eventful Weekend

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FX Flows Quiet After a Very Eventful Weekend

MAY 24, 2021

The U.S. Dollar will be tested this week as the month closes with a highly volatile global market. 

Overview

As re-openings continue gradually and most of the U.S. population starts rejoining outgoing activities, the globe remains a mix of further speculation of strong growth and concern that many developing countries are years behind in inoculation efforts. One contrast in this period is how Asian countries are experiencing infections numbers going up, yet the Western countries and North America are starting to put COVID behind them. In Taiwan, a rise in cases is making traders scratch their head markets are certainly under pressure from the semiconductor and microchip shortage, which is only exacerbated if lockdowns are deemed needed in the island nation.

Be ready for major geopolitical headlines as the world reacts to the situation in Belarus where the government forced a commercial airplane flying from Athens, Greece to Vilnius, Lithuania to land in Minsk to conduct an arrest of a Belarussian citizen wanted by the government for supposedly being an opposition journalist. The outrage is wider and stronger in Europe, where to many leaders this is a hijacking deserving of serious punishment. Russia is currently aligning with Belarus and its controversial leadership, which some have accused of being the last dictatorship in Europe. We will also see how China’s statements continue to affect the crypto world as well as the commodities market, which China says is becoming too pricey.

What to Watch Today…

  • No major events scheduled for today

View Economic Calendar

EUR  

A data-heavy week could guide Euro after last week’s up-down swing following better-than-expected economic indicators in the U.S. Germany and France, the largest economies of the Union are forecast to show major progress in GDP and other gauges while they continue to see improved business confidence and people going back on the street to revive activity.

Raman Patesevich, the man arrested by the Belarus government after one of its jets commanded and escorted down the commercial plane he was in, is a critic of Prime Minister Alexander Lukashenko. Most certainly, the EU is working on coming up with sanctions and coordinating with other global leaders to condemn. Expect Euro to see action as this gets resolved.

GBP  

The Pound Sterling has slowed downs, but it is trading near its best levels since April 2018 as reopening and inoculation efforts have paid off. It was a great scene to watch this weekend, even though it was the last game of the season, as the English Premier League had fans in the stadiums cheering their squads. While a pre-COVID world may not come back exactly as we had it, it is good to see we have overcome some serious hurdles.

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