GBP Exchange Rates Retreat as BoE’s Haldane to Step Down, Pound Euro Falls Half a Cent
The Pound weakened during yesterday’s session following the news that one of the Bank of England’s (BoE) more hawkish members, chief economist Andy Haldane, will be leaving the central bank in June.
The news saw some GBP investors reprice rate hike expectations as the BoE will potentially retain a more dovish tilt, triggering the Pound Euro exchange rate to fall half a cent.
Also limiting the appeal of Sterling on Tuesday was the publication of the UK’s latest GDP figures, which reported a smaller-than-expected rebound in domestic growth in February.
In the absence of any notable UK data releases today, the focus may turn to UK coronavirus headlines as any signs that cases are on the rise again could dent GBP exchange rates.
Euro (EUR) Buoyed by USD Weakness
The Euro trended higher on Tuesday as the single currency’s negative correlation with the US Dollar allowed it to rise as the latter weakened.
However, these gains were tempered somewhat after the latest ZEW surveys revealed a surprise deterioration in German economic sentiment this month.
Looking ahead, EUR investors will be looking to a speech by European Central Bank (ECB) President Christine Lagarde for fresh impetus this afternoon.
US Dollar (USD) Drops Following Jump in Inflation
The US Dollar ticked lower yesterday, with the ‘Greenback’ falling afoul of ‘buy the rumour, sell the fact’ as the latest US CPI releases revealed domestic inflation rocketed up to 2.6% in March.
Also putting pressure on the US Dollar was the news that the Food and Drug Administration (FDA) has called for a pause in the US rollout of the Johnson & Johnson coronavirus vaccine.
Coming up, the key focus for USD investors today will be on a speech by Federal Reserve Chair Jerome Powell. Expect this to drag on the US Dollar if Powell reiterates the bank’s current dovish bias.
Canadian Dollar (CAD) Steady as Oil Prices Rise
The Canadian Dollar was underpinned by a modest rise in oil prices on Tuesday, with the commodity-sensitive ‘Loonie’ finding support as WTI crude held above $60 a barrel.
Australian Dollar (AUD) Firms as Consumer Confidence Soars
The Australian Dollar rallied overnight on Tuesday, with the appeal of the ‘Aussie’ being bolstered as consumer confidence soared to a decade high, and also found strength from the news that the Queensland coronavirus restrictions will be lifted early.
Coming up later tonight, will another drop in domestic unemployment last month help to bolster the Australian Dollar?
New Zealand Dollar (NZD) Strengthens as RBNZ Maintains Status Quo
The New Zealand Dollar also strengthened in overnight trade, after the Reserve Bank of New Zealand (RBNZ) left its monetary policy unchanged following its latest meeting.
10:00 EUR Industrial Production (Feb)
13:00 EUR ECB Lagarde Speech
17:00 USD Fed Powell Speech
02:30 AUD Unemployment Rate (Mar)