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US dollar spikes to six-week high on impressive US data

Movement in the currency market has remained erratic over the past couple of weeks, with this volatility being exacerbated by thin trading conditions over the Easter weekend.

During this period, we’ve seen GBP/EUR trade between €1.17 and €1.16, while EUR/GBP spiked to £0.86 before settling at £0.85.

At the same time, GBP/USD slid from $1.27 to $1.26, while EUR/USD traded between $1.08 and $1.07.

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Staying on top of the latest currency news can help you time your transfers more effectively, so find out what you should be looking out for over the next couple of weeks…

What’s been happening?

The US dollar surged to a six-week high at the start of April in response to an upbeat ISM manufacturing PMI, before almost immediately shedding these gains, despite an impressive US payroll report.

The euro also fluctuated over the past couple of weeks. This volatility was driven by some mixed Eurozone data, which included a weaker-than-expected inflation print.

The pound, meanwhile, has faced headwinds as a result of Bank of England (BoE) interest rate uncertainty, in addition to some uneven UK economic data.

What do you need to look out for?

Looking ahead, the immediate focus will be on the European Central Bank’s (ECB) latest interest rate decision. While no policy changes are expected this month, the euro may slide if the bank confirms it will start cutting rates in June.

Meanwhile, the latest US consumer price index could bolster the US dollar, if March’s data reports an acceleration in domestic inflation.

Finally, GBP investors will be keeping a close eye on the UK’s own CPI figures as another cooling of inflation may stoke BoE rate cut bets and pull the pound lower.

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