Currency Outlook

MAY 2021 – IN BRIEF

What Happened

  • April was a good month for the global recovery narrative as the buck fell 1.6% in value
  • Commodity prices climbed by 3.0%, according to MSCI World Commodity Price Index
  • All major currencies surged against the dollar with the British Pound being the exception
  • Euro recovered its March losses as the COVID situation got better with more vaccinations complemented with temporary lockdowns
  • Major plans for spending are being discussed in the U.S. while individuals in Europe started using their rescue funds after much delay

Tempus’ View

  • May will remain a month of economic improvement, likely keeping dollar strength subdued as other regions shine
  • Possible higher demand for oil and re-opening travel could send CAD beyond its current 2-year highs
  • Regardless of a good inoculation campaign, Sterling has to deal with post-Brexit woes
  • Central banks are watching for inflation, but also for the need to digitalize currency
  • China’s ongoing growth is an excellent global sign, but India’s crisis will need quick resolve

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