Pound (GBP) Muted amid Tax Hike Speculation
The Pound was mostly flat yesterday, amidst speculation that Chancellor Rishi Sunak’s upcoming budget could include some tax hikes.
While concerns over potential tax rises put some pressure on GBP exchange rates, ongoing optimism for a swift UK economic recovery this year helped to limit any losses for the Pound.
Looking ahead, it’s likely we could see Sterling continue to trade in a narrow range today as GBP investors are likely to be reluctant to make any aggressive bets ahead of Wednesday’s budget.
In the meantime, USD strength is driving the Pound US Dollar exchange rate lower at $1.38.
Euro (EUR) Dented by USD Strength
The Euro got off to a poor start this week, weakening through yesterday’s session amidst an uptick in the US Dollar.
Slightly tempering the single currency’s losses, however, was the upward revision of the Eurozone’s manufacturing PMI, with February’s finalised figures coming in at 57.9 against the previously forecast 57.7.
Turning to today’s session, the focus for EUR investors is likely to be on the Eurozone’s consumer price index, which could help the single currency mount a recovery if inflation in the bloc continued to accelerate as expected last month.
US Dollar (USD) Buoyed by US Stimulus Hopes
The US Dollar ticked higher on Monday, as hopes that Joe Biden stimulus package will clear the Senate this week after passing through the House of Representatives buoyed US Treasury yields.
Lending further support to the ‘Greenback’ was the printing of the latest ISM manufacturing PMI, which struck a three-year high in February.
The US Dollar is continuing to strengthen this morning against the Euro and Pound, with USD/GBP gaining over 0.5%.
USD investors will keep an eye on US stimulus developments for fresh impetus today, amidst hopes that Democrats abandoning their plans to raise the minimum wage could see the package more easily pass through the Senate.
Canadian Dollar (CAD) Strengthens on Robust Oil Prices
The Canadian Dollar trended higher on Monday, with the commodity-linked currency finding support as WTI oil consolidated its recent gains at above $61 a barrel.
Coming up, the focus for CAD investors today will be on Canada’s latest GDP figures. Will another healthy expansion of growth in the last quarter of 2020 help to buoy the Canadian Dollar later this afternoon?
Australian Dollar (AUD) Steady as RBA Keeps Rates Unchanged
The Australian Dollar held in a narrow range overnight on Monday, with the Reserve Bank of Australia’s (RBA) decision to keep its monetary policy untouched following its March policy meeting helping to steady the ‘Aussie’.
New Zealand Dollar (NZD) Slips in Early European Trade
The New Zealand Dollar was also mostly flat in overnight trade, but has since taken a sharp dive at the start of today’s European session.