Pound Surges vs Euro and US Dollar on BoE Comments

Pound Firms on Hawkish BoE Comments

The Pound (GBP) struck higher yesterday as GBP investors seized on some hawkish comments from Bank of England (BoE) policymaker Gertjan Vlieghe.

Vlieghe triggered a spike in Sterling as he suggested that interest rates could start to rise from early 2022, so long as the transition from the furlough scheme doesn’t prompt a spike in unemployment.

In the absence of any notable UK economic releases, GBP investors are likely to look to domestic coronavirus developments for fresh impetus.

Euro Undermined by Dovish ECB Remarks

The Euro (EUR) ticked lower against the majority of its peers on Thursday as EUR investors were left disappointed by dovish comments from European Central Bank (ECB) policymaker Pablo Hernandez de Cos.

De Cos suggested that the ‘the ongoing rise in euro area inflation is transitory’, further dampening ECB rate expectations.

Looking ahead, the Euro could receive some support this morning, as the Eurozone’s economic sentiment index is forecast to have risen again this month, having previously struck a post-pandemic high in April.

US Dollar Subdued Following Mixed Data

The US Dollar (USD) was mostly muted through yesterday’s trading session as USD investors reacted to mixed US economic data.

While the latest US GDP estimate and jobless figures printed above expectations, Thursday’s most notable release of April’s durable goods orders revealed a surprise decline in new orders.

In the spotlight today will be Federal Reserve’s preferred inflation indicator, the latest PCE price index. While the release is expected to confirm a sharp acceleration of domestic inflation last month, any upside in the US Dollar looks limited, given the Fed’s current dovish bias.

Canadian Dollar Climbs despite Weaker Oil Prices

The Canadian Dollar (CAD) firmed on Thursday, with CAD investors appearing to shrug off a modest decline in oil prices, in spite of there being no clear catalyst to propel the ‘Loonie’ higher.

Australian Dollar Undermined by USD Resurgence

The Australian Dollar (AUD) initially struck higher overnight on Thursday, amidst a prevailing risk-on mood. However, the ‘Aussie’ was forced to relinquish most of these gains by the end of the Asian session following a pickup in USD demand, which dampened market risk appetite.

New Zealand Dollar Slips as Risk Appetite Dwindles

The New Zealand Dollar (NZD) also came under pressure towards the end of today’s Asian trading session, mostly in response to a rebound in the US Dollar.

Data Releases

10:00 EUR Economic Sentiment (May)

13:30 USD PCE Price Index (Apr)

15:00 USD Consumer Sentiment (May)