Pound Buoyed as Sturgeon Dismisses Indyref Speculation
The Pound Euro exchange rate strengthened to a two-week high yesterday following Nicola Sturgeon’s comments denying that she would seek to hold an illegal independence referendum should her party secure a majority following today’s election.
While Sturgeon did not rule out that her Scottish National Party (SNP) could pursue another referendum through the courts, it was enough to relieve concerns of a ‘wildcard’ indyref2.
Centre stage today will be the conclusion of the Bank of England’s (BoE) latest policy meeting.
No policy changes are expected from the BoE this month, but Sterling could strengthen if the bank upgrades its annual growth forecast in light of some solid UK data releases in recent weeks.
Euro Dented by USD Strength
The Euro was on the defensive on Wednesday as the single currency continued suffering from its negative correlation with the US Dollar.
However, helping to temper this downside in EUR exchange rates was the Eurozone’s latest PMI releases, which saw growth in the bloc’s private sector revised slightly higher last month.
Turning to today’s session, the Euro could mount a comeback after data published at the start of the session reported a solid pickup in German factory orders in March.
US Dollar Bolstered by Yellen Comments
The US Dollar rallied through yesterday’s session, as USD investors seized on comments made by US Treasury Secretary Janet Yellen late on Tuesday regarding potential rate hikes.
However, the US Dollar eased from its best levels later in the day after the latest ISM non-manufacturing PMI and ADP employment report both printed slightly below expectations.
In focus for USD investors today will be last week’s initial jobless claims print, with the US Dollar likely to strengthen this afternoon if new claims continued to fall.
Canadian Dollar Firms as WTI Oil Climbs to Two-Month High
The Canadian Dollar struck higher on Wednesday, as WTI oil climbed above $66 a barrel and supported the oil-sensitive ‘Loonie’.
Australian Dollar Tumbles amid Tensions with China
The Australian Dollar dived overnight on Wednesday as AUD investors were spooked by the announcement that China has ‘indefinitely suspended’ all activities under the China-Australia Strategic Economic Dialogue.
New Zealand Dollar Retreats in Risk-Off Trade
The New Zealand Dollar was also dented in overnight trade, as the escalation of tensions between Australia and China dampened the appeal of the risk-sensitive ‘Kiwi’.
Data Releases
07:00 EUR German Factory Orders (Mar)
07:00 GBP Scottish and Local Elections
09:30 GBP Services PMI (Apr)
10:00 EUR Retail Sales (Mar)
12:00 GBP BoE Interest Rate Decision
13:30 USD Initial Jobless Claims (1/May)
23:30 AUD Ai Group Services Index (Apr)