Morning Market Review
EUR/USD
The European currency shows a moderate decline against the US dollar during the Asian session, building on the "bearish" momentum formed on March 31, when EUR/USD retreated from its March 1 local highs. Euro positions remain under pressure amid worsening prospects for global economic recovery due to the looming crisis associated with the conflict over Ukraine. Western countries continue to increase unprecedented sanctions pressure on the Russian economy, which, in turn, stimulates further inflation in almost all developed countries. In this regard, many financial regulators have moved to tightening monetary policy, but the European Central Bank (ECB) until recently tried to take a wait-and-see attitude. At the moment, it is expected that the European regulator will raise the rate in the summer, but plans for the near future may still change. Macroeconomic statistics from Europe published yesterday turned out to be mixed. The volume of Industrial Production in Germany in February rose by 0.2% after an increase of 1.4% a month earlier. Analysts had expected zero dynamics of the indicator. In annual terms, production rates accelerated from 1.1% to 3.2%. The volume of Retail Sales in the euro area for the same period accelerated from 0.2% to 0.3%, which was twice worse than analysts’ forecasts. In annual terms, sales volumes slowed down from 8.4% to 5.0%, while the forecast was 4.8%.
GBP/USD
The British pound is traded with mixed dynamics against the US currency during the morning session, consolidating near 1.3060. Market activity remains quite low, while on Friday there are no releases of any interesting macroeconomic statistics from the US or the UK. The situation around Ukraine is still in the spotlight. Western countries continue to impose new restrictions on the Russian economy, aimed primarily at reducing or completely banning energy imports. The export of high-tech equipment, cars and agricultural machinery is also noticeably limited. However, these measures have not yet brought the expected effect, since the special military operation continues. At the same time, the position of the Western authorities has become a catalyst for updating record highs in commodity markets, which threatens to increase inflation in many regions of the world.