EUR/GBP: the interest rate of the European Central Bank remained at 4.50%
The euro is at low levels compared to most major currencies, with the exception of the US dollar, while the EUR/GBP pair shows a corrective movement in morning trading, settling at 0.8541.
At yesterday's meeting of the European Central Bank (ECB), officials, as expected, left the main monetary rates unchanged (the main rate is 4.50%, the marginal rate is 4.75%, the deposit rate is 4.00%) and expressed readiness to reduce them if inflationary pressure decreases. Regulators confirmed that the current slowdown in consumer price growth is in line with medium-term expectations, due to lower prices for food and household goods, but did not specify the timing of a possible change in interest rates. It also announced plans to complete the reinvestment program for emergency asset purchases due to COVID-19 by the end of the year and significantly reduce the asset purchase program. The reduction of the emergency procurement program is taking place at a rate of 7.5 billion euros per month, which will allow it to be completed by the end of November or December.
UK economic growth remains weak: in February, GDP growth was, as expected, only 0.1%, which is lower than the previous 0.3%, and this led to a decrease in annual growth to -0.2%. Among the main factors of such dynamics are industrial production, which increased by 1.1%, improving the annual rate to 1.4%, and the construction sector, where a decrease of 1.9% on a monthly basis and 2.0% year-on-year was recorded.
- Resistance levels: 0.8560, 0.8600.
- Support levels: 0.8530, 0.8480.
USD/TRY: Investors tend to take profits after a week of growth
The USD/TRY currency pair shows ambiguous trends, holding near the level of 32.3165. Traders are refraining from opening new positions on Friday due to the expectation of a limited amount of macroeconomic data from the United States, as well as due to the profit-taking mood after moderate growth during the week. Earlier, the US dollar was helped by inflation data, which increased investors' doubts about the imminent reduction of the US Federal Reserve interest rate by 25 basis points in June.
The Turkish lira continues to be under pressure due to economic difficulties in the country. Despite the efforts of monetary authorities and a significant increase in rates by the Central Bank of Turkey, annual inflation accelerated from 67.07% in February to 68.50% in March. At the same time, independent analysts from the Inflation Research Group (ENAG) record an annual price increase of more than 120%. Additionally, on April 9, the Turkish Ministry of Commerce imposed restrictions on the export of 54 categories of goods to Israel, including cement, glass, iron, aluminum and steel, which puts additional pressure on the already strained construction sector. These sanctions, in effect until the end of hostilities and the creation of conditions for free humanitarian aid to Gaza, are likely to raise prices for both Israeli and Turkish consumers.
- Resistance levels: 32.4500, 32.6000, 32.7500, 32.9000.
- Support levels: 32.3000, 32.1500, 32.0000, 31.8306.
NZD/USD: the US currency has reached a new record
The NZD/USD currency pair is experiencing a correction near the 0.5995 level, as the New Zealand currency is facing difficulties in trying to regain its position against the background of disappointing macroeconomic statistics.
The March report showed that spending via e-cards in New Zealand decreased by 0.7%, which in absolute terms is a decrease of NZ$ 45 million compared to February. Compared to March of the previous year, 2023, the total amount of expenses decreased by 3.0%. This decrease was recorded in almost all key sectors of the economy: of the seven main sectors, only wholesale trade, with the exception of services, showed an increase of 2.1%. The biggest deterioration was seen in the sectors related to sales of clothing and motor vehicles, each of which showed a 2.2% drop. There was also a decrease in the fuel sectors by 1.4%, durable goods by 0.3% and consumables by 0.2%.
These data indicate continued pressure on the New Zealand economy, which negatively affects the national currency and contributes to volatility in the foreign exchange market. The lack of significant improvement in economic indicators may continue to put pressure on the New Zealand dollar in the near term.
- Resistance levels: 0.6030, 0.6110.
- Support levels: 0.5970, 0.5870.
Crude Oil market analysis
Prices for North American WTI Crude Oil have stabilized at 85.09 in a sideways trend driven by geopolitical tensions in the Middle East and seasonal growth in global fuel demand.
The situation in the Middle East remains tense with expectations of possible Iranian retaliatory attacks on Israeli infrastructure, which has led to warnings for citizens of some countries to visit the region. At the same time, the Organization of Petroleum Exporting Countries (OPEC) in its latest monthly report predicted that global oil demand will increase to 2.25 million barrels per day in 2024, and decrease to 1.85 million barrels per day in 2025. A seasonal increase in fuel consumption is also expected in the second quarter: demand for aviation kerosene will grow by 600 thousand barrels per day, for gasoline — by 400 thousand, and for diesel fuel — by 200 thousand barrels per day.
- Resistance levels: 86.30, 90.00.
- Support levels: 84.00, 80.60.