Pound (GBP) Firms in Response to Budget
The Pound (GBP) ticked higher yesterday as GBP investors broadly welcomed Chancellor Rishi Sunak’s 2021 Budget statement as he pledged to do ‘whatever it takes’ to support the UK’s economic recovery.
However, with most of the measures announced having already been priced in by markets, and GBP investors wary about Sunak’s announcement that corporation tax would be rising from 2023, the upside proved limited.
In the absence of any notable UK data releases, the focus for GBP investors through the second half of this week is likely to be on domestic coronavirus statistics, as a continued fall in cases increases the chance the government will be able to move ahead with its easing plans.
Euro (EUR) Dented by USD Strength
The Euro (EUR) ticked lower against the majority of its peers on Wednesday as the currency’s negative correlation with the US Dollar (USD) proved to be a liability.
Further limiting the appeal of the single currency was the Eurozone’s latest PMI figures, which confirmed the bloc’s service sector suffered its sixth consecutive month of contraction in February.
Looking ahead, the Euro could face additional headwinds today, as data is expected to show Eurozone retail sales growth contracted sharply in January.
US Dollar (USD) Rallies on Rising Treasury Yields
The US Dollar (USD) strengthened during yesterday’s session as the currency was carried higher by another jump in US Treasury yields.
However, these gains were trimmed slightly in the latter half of the session after the latest ISM non-manufacturing PMI printed below expectations in February.
Coming up, the latest US jobless figures, and a speech by Federal Reserve Chair Jerome Powell may provide fresh impetus for the US Dollar today.
Canadian Dollar (CAD) Buoyed by Bullish Oil Prices
The Canadian Dollar (CAD) firmed on Wednesday, as the appeal of the oil-sensitive ‘Loonie’ was bolstered by an almost 2% jump in WTI crude prices.
Australian Dollar (AUD) Rallies on Record Trade Surplus
The Australian Dollar (AUD) mounted a recovery overnight on Wednesday, with the ‘Aussie’ finding significant support after Australia’s latest trade figures reported a record trade surplus in January.
New Zealand Dollar (NZD) Strengthens in Spite of Tepid Mood
The New Zealand Dollar (NZD) also struck higher in overnight trade, with the ‘Kiwi’ seemingly defying the muted market mood to rise alongside its antipodean cousin the ‘Aussie’.