Many investors will return from the long Easter break to study data on eurozone consumer confidence which could support the euro which is now trading at one-and-a-half-month lows against a bullish sterling. The pound also remains near four-year highs against the US dollar after rallying sharply last week on strong UK labour market data. The Bank of England will publish minutes from its April meeting and guidance on future UK monetary policy could have a significant impact on sterling trade this week. Currency trading is likely to open up with markets also expected to react to a host of top-tier economic reports. The euro area will start by releasing its latest manufacturing and service sector PMI surveys which will be key for the euro.

The PMI reports will follow on from fresh Chinese manufacturing data which will probably impact the yuan and a number of currencies which are tied to news on commodities and global growth. A little later, markets will watch for Canadian retail sales data, a report on US new home sales and New Zealand’s interest rate decision. European Central Bank President Mario Draghi will be speaking tomorrow and his comments could move currency markets if there is mention of a possible Quantitative Easing programme.

The US dollar rose in light holiday trade, boosted by gains against the yen and signs of strengthening momentum in the US economy. The yen starts the week on a bad note after disappointing Japanese trade data depicted the Asian economy on a fragile footing before a national sales tax increase went into effect earlier this month. US data last week showed the Philly Fed index of Mid-Atlantic business activity at a September high, a gauge of jobless claims at a multiyear low, and data on leading indicators gaining for a third straight month in March.