EUR: Discount for early birds a euro

This Sunday, Europe’s clocks advance by one hour, and Friday, 2 April, marks the start of the Easter holidays for most of Europe. It’s been a long quarter, and many players will be hoping to make it to Friday alive. There are few indicators that the dollar’s correction has ended, leaving EUR/USD vulnerable to 1.1700 in the coming week. Much attention will be paid to the virus situation in Europe, including whether lockdowns can slow the rise in case numbers and whether the slow rate of vaccinations can eventually catch up.

This week’s data could show a slight increase in the rate of Eurozone CPI in March, but nothing to worry about the ECB about. More customer and business trust readings should be seen throughout the country. These have held up well so far, despite the fact that they were mostly taken before new lockdowns and before Europe’s most recent threat, the Suez blockade, which could start to weigh on Europe’s industrial sector if it is not resolved quickly. Portfolio rebalancing flows will also be a priority at the end of the quarter. European outperformance of the US in the first quarter, both in terms of equity and bond markets, can prompt some EUR selling on March 30/31.