April 2024 Update On Foreign Exchange Markets

RegencyFX give their monthly update on developments in the foreign exchange markets. April 2024 saw the US Dollar (USD) remain dominant, supported by cautious investor sentiment and expectations of a slower pace of interest rate cuts from the Federal Reserve compared to other central banks.

• USD: The greenback held near a five-month high throughout the month. Market forecasts suggested the Fed might be less aggressive with rate cuts than previously anticipated, giving the USD a relative yield advantage. This kept the USD strong, particularly against Asian currencies.
• EUR: The Euro (EUR) experienced a month of consolidation, trapped in a tight trading range. The European Central Bank (ECB) was expected to initiate interest rate cuts, but the timing and extent remained unclear. Traders awaited direction before making significant moves, leaving EUR/USD in a well-defined range with a slight downward bias .
• GBP: The British Pound (GBP) also saw limited movement in April. The Bank of England (BoE) was projected to lag behind the ECB in terms of rate cuts, offering some support to GBP. However, overall, GBP remained range-bound around the 0.85-0.86 range against the EUR.

Key Events and Trends:

• Monetary Policy Divergence: Expectations of central bank policy decisions played a significant role in currency movements. The anticipated slower pace of easing from the Fed compared to the ECB and potentially other central banks bolstered the USD.
• Seasonality: Historical trends suggested April might be a bullish month for GBP/USD, while USD/CAD could face weakness. GBP/USD’s Most Bullish Month, USD/CAD’s Most Bearish].
• Japanese Yen Intervention: The Japanese Yen (JPY) remained in focus as it approached 34-year highs against the USD. Japanese policymakers signaled a willingness to intervene directly in the market to weaken the Yen if it strengthened further GBP/USD’s Most Bullish Month, USD/CAD’s Most Bearish].

Looking Ahead:

• The future direction of the EUR, USD, and GBP will likely depend on the actual pace of monetary policy adjustments from central banks, particularly the Fed and ECB.
• Geopolitical events and risk sentiment will also continue to influence currency markets.

Currency ranges in April

GBP/EUR

High: 1.1729 on April 17, 2024.

Low: 1.1571 on April 22, 2024.

GBP/USD

High: 1.2700 on April 10, 2024.

Low: 1.2310 on April 22, 2024.

GBP/AUD

High: 1.9454 on April 16, 2024.

Low: 1.9058 on April 29, 2024

EUR/USD

High: 1.0880 on April 9, 2024.

Low: 1.0610 on April 16, 2024.

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