Today’s Currency News: Euro Tumbles as German Court Ruling Deems ECB Stimulus Measures ‘Unconstitutional’

Pound (GBP) Sidelined by Brexit Concerns

Trade in the Pound (GBP) was mixed yesterday amidst renewed no-deal Brexit fears after the UK’s Health Secretary, Matt Hancock, suggested there is no need to put UK-EU trade talks on hold.

This followed comments by Irish Foreign Minister Simon Coveney, who bemoaned a lack of progress in Brexit negotiations and warned of another crisis point in talks unless significant headway is made soon.

Coming up, the Pound looks likely to struggle today as the UK’s latest PMI figures are expected to report a sharp downturn in construction sector activity last month.

Euro (EUR) Slumps on German Court Ruing

The Euro (EUR) dived on Tuesday in response to a German court ruling which deemed the European Central Bank’s (ECB) bond buying programme as ‘unconstitutional’ and the ECB had exceeded its monetary policy mandate.

The ruling raises questions over the ECB’s ability to operate as an independent entity, weakening the Euro for fears this could undermine the bank’s stimulus efforts.

Meanwhile, the Euro is in for further losses this morning after Germany reported a sharp fall in factory orders in March.

US Dollar (USD) Subdued amid Market Optimism

The US Dollar (USD) struggled through yesterday’s session as demand for the safe-haven currency was capped by rising optimism that more countries are getting closer to restarting their economies.

This slide in the ‘Greenback’ came in spite of the ISM non-manufacturing PMI revealing that US service sector growth was more robust than expected last month, with the index sliding from 52.5 to 41.8, beating forecasts for a more dramatic drop to 36.8.

Looking ahead, the ADP employment report today may keep a lid on the US Dollar this afternoon as it’s set to report a sharp rise in unemployment in April.

Canadian Dollar (CAD) Buoyed by Continued Oil Rally

The Canadian Dollar (CAD) trended higher again on Tuesday, with the oil-sensitive ‘Loonie’ continuing to gain amidst a sustained crude rally which has propelled US oil prices close to $24 a barrel for the first time since mid-April.

Australian Dollar (AUD) Supported by Robust Retail Sales

The Australian Dollar (AUD) traded in a narrow range overnight on Tuesday, with the ‘Aussie’ finding support from solid domestic retail sales in March and a modest improvement in market risk appetite.

New Zealand Dollar (NZD) Steady on Better-Than-Expected Jobs Report

The New Zealand Dollar (NZD) also held its ground during Wednesday’s Asian session, with the ‘Kiwi’ supported by stronger-than-expected first quarter employment figures.

Matthew Andrews

Contact Matthew Andrews