Daily Currency News: Pound Euro Exchange Rate Slumps Despite UK Lockdown Easing Go-Ahead

Pound (GBP) Slides on Profit Taking

The Pound (GBP) fell sharply during yesterday’s session following investor profit taking after making solid gains at the end of last week and over the Easter weekend.

With a lack of any fundamental catalyst for its losses, the position adjustment pushed GBP exchange rates lower despite the UK government confirming lockdown easing would go ahead with non-essential retail reopening on 12 April.

The Pound may limit its losses this morning, with the UK services PMI forecast to confirm the sector rebounded into growth territory in March, the first time since October 2020.

Euro (EUR) Gains as USD Lacks Drive

The Euro (EUR) made solid gains during Tuesday’s European session as a lack of drive in the US dollar boosted the single currency due to the negative correlation in EUR/USD.

However, EUR exchange rate gains were limited after the Eurozone unemployment rate unexpectedly printed higher than forecast at 8.3%, above expectation of 8.1%.

Looking ahead, the Euro could add to its gains this morning after the Eurozone service PMI for March came in at 49.6, upwardly revised from 48.8. While the reading still indicates a slight contraction, the surprise in activity could lend some support to EUR.

US Dollar (USD) Steady ahead of FOMC Minutes

The US Dollar (USD) was mixed yesterday as a modest uptick in US Treasury yields stabilised the ‘Greenback’.

Following significant losses over the Easter break, the US Dollar recovered some of Monday’s losses, which came about as yields dropped after strong non farm payroll and ISM services PMI data releases.

Looking ahead, the focus will be on the Federal Open Market Committee (FOMC) minutes this evening as USD investors look for hints on the Fed’s forward guidance and stance on inflation, particularly after recent ISM PMI releases highlighted strengthening demand and supply shortages.

Canadian Dollar (CAD) Mixed despite Slight Uptick in Oil Prices

The Canadian Dollar (CAD) was mixed through yesterday’s session as oil prices struggle to capitalise on the prospect of stronger economic growth, instead only rising modestly just below $60 a barrel.

CAD exchange rates could experience some volatility later today, with the trade balance forecast to narrow and the Ivey PMI forecast to hold at nearly the same level as February.

Australian Dollar (AUD) Slips amid Cautious Trade

The Australian Dollar (AUD) fell in overnight trade as market risk sentiment was cautious and Australia’s services PMI for March came in slightly lower than forecast, although still in growth territory.

New Zealand Dollar (NZD) Lacks Support as USD Strengthens

The New Zealand (NZD) weakened overnight as recovering US Dollar exchange rates weighed on demand for the ‘Kiwi’.

Data Releases

09:00 EUR Services PMI (Mar)

09:30 GBP Services PMI (Mar)

13:30 CAD Balance of Trade (Feb)

13:30 USD Balance of Trade (Feb)

15:00 CAD Ivey PMI (Mar)

19:00 USD FOMC Minutes

Matthew Andrews

Contact Matthew Andrews