Pound (GBP) Flat as BoE Hints at More QE
The Pound (GBP) was mostly flat through yesterday’s trading session as concerns over the UK’s coronavirus outbreak were offset by comments from the Bank of England’s (BoE) Andrew Bailey.
The new BoE Governor reiterated the bank is not considering cutting interest rates below zero, instead hinting the BoE may be preparing to expand its stimulus programme.
Coming up, we may see Brexit jitters return following the conclusion of the latest round of negotiations. Will a lack of progress send the pound lower?
Euro (EUR) Stable on Revised German Inflation Figures
The Euro (EUR) also traded in a narrow range on Thursday as markets reacted to Germany’s latest inflation release.
April’s final consumer price index saw domestic inflation revised up from 0.3% to 0.4%, offering limited support to the single currency as EUR investors await Germany’s first quarter GDP estimate.
The release is likely to weigh heavily on the Euro this morning as the GDP figures will more than likely report a sharp slump in economic growth at the start of the year.
US Dollar (USD) Rallies on US-China Concerns
The US Dollar (USD) struck higher through yesterday’s session as investors flocked to the safe-haven currency amidst rising tensions between the US and China.
Markets were spooked by the prospect of a new trade war as Donald Trump intensified his criticism of Beijing’s handling of the coronavirus, even threatening to cut ties with China over the outbreak.
However, the US Dollar may relinquish some of these gains later this afternoon as the US is expected to report record drops in retail sales and industrial production in April.
Canadian Dollar (CAD) Steady as Oil Prices Appreciate
The Canadian Dollar (CAD) was mostly stable on Thursday. The oil-sensitive ‘Loonie’ was supported by a modest uptick in crude prices after the International Energy Agency (IEA) revised its forecasts for 2020, predicting demand may be slightly improved as countries begin reopening their economies.
Australian Dollar (AUD) Weakens in Risk-Off Trade
The Australian Dollar (AUD) trended lower overnight on Thursday as renewed fears of a US-China trade weighed heavily on the risk-sensitive currency.
New Zealand Dollar (NZD) Undermined by Gloomy PMI Figures
The New Zealand Dollar (NZD) also weakened in overnight trade as New Zealand’s latest PMI figures reported domestic manufacturing activity plummeted to an all-time low in March.