Pound Buoyed by GDP Release
The Pound (GBP) ticked higher during yesterday’s session after the UK’s latest GDP figures printed above expectations.
The Office for National Statistics (ONS) reported the UK economy contracted by 1.5% in the first quarter of 2021 against forecasts for a 1.6% slump. Alongside a stronger-than-expected monthly growth reading in March, this bolstered Sterling sentiment on hopes 2021 will see a record surge in GDP.
Coming up, GBP investors will look to a speech by Bank of England (BoE) Governor Andrew Bailey later this evening for fresh impetus today.
Euro Undermined by USD Strength
The Euro (EUR) was placed on the defensive on Wednesday as its negative correlation with the US Dollar (USD) undermined the single currency as the latter rose.
However, helping to temper the Euro’s losses was the European Commission’s (EC) latest economic projections, which saw the EC raise it growth forecasts in light of the EU’s acceleration of its vaccine rollout.
In the absence of any major Eurozone data releases today, the Euro may struggle to attract support, particularly if investors continue to favour the US Dollar.
US Dollar Rallies as US Inflation Rockets
The US Dollar rallied during yesterday’s trading session after the latest US consumer price index reported that domestic inflation soared to a dizzying 4.2% in April, striking its highest levels since 2008.
This was much higher than the estimated jump to 3.6% and saw USD investors revise their interest rate expectations amid speculation it will force the Federal Reserve to revisit its guidance that the rise in inflationary pressure was ‘largely transitory’.
Turning to today’s session, the primary focus for USD investors will be the latest US initial jobless claims. Will a continued fall in new claims last week be enough to buoy the US Dollar in spite of the recent massive payroll miss?
Canadian Dollar Bolstered by Rising Oil Prices
The Canadian Dollar (CAD) struck higher on Wednesday as the appeal of the commodity-linked currency was bolstered in light of bullish oil prices.
Coming up, the ‘Loonie’ could receive another boost today, if Bank of Canada (BoC) Governor Tiff Macklem strikes a hawkish tone in his speech later this afternoon.
Australian Dollar Stuck at One-Week Low amid Risk-Off Trade
After plunging during Wednesday’s European session following the jump in the US Dollar, the Australian Dollar (AUD) consolidated these losses overnight as fears of a full-scale war between Israel and Palestinians weighed on market risk appetite.
New Zealand Dollar Undermined by Cautious Mood
The New Zealand Dollar (NZD) also struggled overnight on Wednesday as the prevailing risk-off mood saw investors shun the high-yield ‘Kiwi’.
13:30 USD Initial Jobless Claims (8/May)
16:00 CAD BoC Macklem Speech
17:00 GBP BoE Bailey Speech