UK Data Beats Forecasts, Pound Sterling (GBP) Exchange Rates Firm
Pound Sterling (GBP) exchange rates generally gained yesterday as investors were pleasantly surprised to find that UK net consumer credit had increased by more than forecast in April, rising 1.8 billion on the month.
As March’s sharp slowdown in consumer credit was considered one of the reasons for the Bank of England’s (BoE) more dovish policy meeting this boosted hopes that an interest rate hike remains on the cards.
With forecasts pointing towards a dip in May’s UK manufacturing PMI, however, Sterling could soon come under renewed pressure.
Euro (EUR) Exchange Rates Supported by Higher Inflation
Euro (EUR) exchange rates remained on a stronger footing during Thursday’s European session, benefitting from news that the Five Star Movement and League are working to revive a coalition.
With political jitters easing in Italy the appeal of the single currency naturally improved, especially as the latest Eurozone consumer price index bettered forecasts. In an encouraging development for the European Central Bank (ECB) the inflation rate picked up to 1.9% on the year, just below the ECB’s 2% target.
Even so, the results of a vote of no confidence against Spanish Prime Minister Marino Rajoy could see the Euro weaken in response to renewed political uncertainty today.
US Dollar (USD) Exchange Rates Could Gain on Positive Employment Stats
Positive jobless claims data was not enough to bolster demand for US Dollar (USD) exchange rates yesterday, even though this demonstrated a continued tightening of the domestic labour market.
If May’s non-farm payrolls figure shows an uptick on the month this is likely to give USD exchange rates a boost, encouraging hopes of a more aggressive Federal Reserve policy outlook.
Poor GDP Data Sent Canadian Dollar (CAD) Exchange Rates Lower
Canadian Dollar (CAD) exchange rates were pressured lower yesterday as the first quarter annualised Canadian gross domestic product failed to impress, with the pace of growth easing from 1.7% to 1.3%.
This created fresh doubt over the prospect of the Bank of Canada (BoC) raising interest rates again sooner rather than later.
Demand for the Canadian Dollar could decline further if the latest Canadian manufacturing PMI proves disappointing.
Australian Dollar (AUD) Exchange Rates Boosted by Chinese Manufacturing PMI
An unexpectedly steady Australian private sector credit figure encouraged Australian Dollar (AUD) exchange rates to push higher on Thursday, even though first quarter private capital expenditure fell short of forecast.
Confidence in the ‘Aussie’ was also boosted by a stronger Chinese manufacturing PMI, which encouraged bets that commodity demand will pick up further. Although global geopolitical tensions were reignited by the Trump administration’s decision to impose steel and aluminium tariffs on key allies this was not enough to dent AUD exchange rates.
New Zealand Dollar (NZD) Exchange Rates Resilient
Even though May’s ANZ activity outlook dipped from 17.8 to 13.6, New Zealand Dollar exchange rates were still able to climb yesterday. A similarly underwhelming ANZ business confidence index also failed to weigh on NZD exchange rates. Markets continued to favour the antipodean currency over its rivals as the general sense of risk appetite picked up.
The New Zealand Dollar did ease slightly lower overnight however as the domestic terms of trade index fell by -1.9% on the quarter.