Daily Currency News: US Dollar Strengthens as Trump Reignites Trade War Fears

Pound (GBP) Undermined by End-Of-Month Sell-Off

The Pound (GBP) closed last week on the back foot as some end-of-month moves prompted a sharp sell-off of the UK currency.

Not helping Sterling was the finalised UK Manufacturing PMI, which saw domestic factory activity revised even lower in April.

Looking to the week ahead, the main catalyst of movement in the Pound will be the publication of Boris Johnson’s ‘comprehensive plan’ for reopening the UK economy, with GBP exchange rates potentially weakening if this includes an extension to the current lockdown.

Euro (EUR) Rallies from Post-GDP Lows

The Euro (EUR) roared higher on Friday, with the single currency appearing to benefit in end-of-month trade amid optimism as Eurozone countries gear up to reopen parts of their economy.

However, these gains remain capped by the European Central Bank’s rate decision earlier in the week as it held off implementing additional stimulus measures and struck a gloomy tone in its forward guidance.

EUR investors’ focus this week is likely to be Germany’s latest industrial data, with an expected slump in factory activity in March likely to limit the appeal of the Euro.

US Dollar (USD) Buoyed on US-China Trade War Fears

The US Dollar (USD) strengthened at the end of last week’s session, with demand for the safe-haven currency rising in response to renewed trade war fears after Donald Trump threatened China with new tariffs.

Also supporting the ‘Greenback’ on Friday was the latest ISM manufacturing PMI, which revealed US factory activity contracted at a slower pace than expected in April.

Turning to this week, the focus for USD investors is the latest US payroll report, with an unprecedented drop in employment set to weigh on the US Dollar.

Canadian Dollar (CAD) Slips Despite WTI Crude Approaching $20

The Canadian Dollar (CAD) ticked lower on Friday, with the oil-sensitive ‘Loonie’ depreciating as WTI crude approached $20 a barrel for the first time in almost two weeks after major oil producers started to implement production cuts.

Australian Dollar (AUD) Slumps on Trade War Fears

The Australian Dollar (AUD) remained on the back foot through Friday’s trading session, with demand for the risk-sensitive currency taking a significant hit after Donald Trump reignited his trade war with China.

New Zealand Dollar (NZD) Slips in Risk-Off Trade

The New Zealand Dollar (NZD) also fell at the end of last week, as a risk-off mood saw investors shun the ‘Kiwi’.

Matthew Andrews

Contact Matthew Andrews