Daily Currency News: Pound Accelerates as GDP Slightly Beats Estimates

Pound (GBP) Supported as Contraction in UK Economy Narrower than Forecast

The Pound (GBP) made some tentative gains during yesterday’s session in response to some better-than-expected UK GDP figures.

While the UK economy shrank by 2% in the first quarter – its largest slump since the financial crisis – it beat gloomier estimates that growth would contract by 2.5%, prompting a modest uptick in Sterling.

Turning to the second half of the week, the Pound could face some headwinds as the latest round of Brexit talks come to a close, with the UK and EU expected to remain at loggerheads over the terms of their future trade relationship.

Euro (EUR) Muted as Eurozone Industrial Production Suffers Record Drop

The Euro (EUR) was left mostly directionless on Wednesday as markets reacted to the Eurozone’s latest industrial production figures.

These revealed factory output in the bloc suffered a record drop in March, collapsing 11.3% as businesses were shuttered by coronavirus lockdown measures.

Coming up, the European Central Bank’s (ECB) economic bulletin is in focus for EUR investors today. Will it offer any hints into how the bank will shape its future monetary policy?

US Dollar (USD) Mixed Following Powell Comments

The US Dollar (USD) traded in a wide range yesterday as Federal Reserve Chair Jerome Powell discussed the current state of the US economy.

This saw the ‘Greenback’ dip as Powell warned the US risks a ‘prolonged recession’ before recouping some ground as he said negative interest rates are not something the Fed is currently considering.

Meanwhile, the US Dollar may remain on the back foot through today’s session as initial jobless claims are expected to report another sizable increase in US unemployment last week.

Canadian Dollar (CAD) Muted as Oil Prices Hold Steady

The Canadian Dollar (CAD) continued to be directed by the price of oil on Wednesday, with the commodity-linked ‘Loonie’ left rangebound as WTI crude held at $25 a barrel.

Australian Dollar (AUD) Undermined by Weak Employment Report

The Australian Dollar (AUD) struggled in overnight trade on Wednesday with the release of Australia’s latest jobs report.

This revealed unemployment rocketed by almost 600,000 in April, Australia’s largest slump in employment on record.

New Zealand Dollar (NZD) Dented by Gloomy Forecasts

The New Zealand Dollar (NZD) also trended lower in overnight trade as the latest government forecasts predicted a sharp deterioration in economic activity this year.

Matthew Andrews

Contact Matthew Andrews