US Dollar Continues to Fall on Disappointing GDP Data

Pound (GBP) Muted amid Lack of Data 

The Pound (GBP) was quiet through yesterday’s session, as a lack of market moving data left Sterling open to losses. 

However, the EU’s pausing of legal proceedings against the UK over the Northern Ireland protocol earlier in the week removed a headwind for Sterling, limiting the downside. 

In the absence of any notable data releases today, Covid and Brexit developments could continue to drive movement in the Pound. 

Euro (EUR) Firms on Positive Data 

The Euro (EUR) strengthened yesterday, hitting a three-week high against the US Dollar (USD), as economic sentiment in the Eurozone rose for the sixth consecutive month to reach record levels. 

Germany’s better-than-expected inflation rate and unemployment rate also supported the single currency, as did the US Dollar’s downside. 

EUR exchange rates could climb this morning, as the latest GDP growth data from the Eurozone and Germany are forecast to show a recovery from last quarter’s dismal results. 

US Dollar (USD) Extends Downside following Fed Decision 

The US Dollar (USD) kept sliding yesterday, hitting a six-week low against the Pound, after the Federal Reserve took a dovish stance in its latest policy meeting. 

The ‘Greenback’ found no let-up in the afternoon as both the US GDP growth rate and latest jobless claims data disappointed USD investors. 

With a number of US releases out this afternoon, including personal spending and the finalised Michigan consumer sentiment report, any more unexpected results could drive some movement in USD. 

Canadian Dollar (CAD) Gains as Oil Prices Rise 

The Canadian Dollar (CAD) climbed yesterday, as an improvement in oil prices boosted the commodity-linked ‘Loonie’. 

If oil prices keep climbing, this could support CAD. However it may be offset by Canada’s GDP figures this afternoon, as the economy is expected to have contracted by 0.3% again in May. 

Australian Dollar (AUD) Down on Lacklustre Data 

The Australian Dollar (AUD) ticked lower overnight, as Australia’s producer price index printed at 0.7%, well below predictions of 2.1%. The continued lockdown in Sydney also weighed on the ‘Aussie’. 

New Zealand Dollar (NZD) Softens on Risk-Off Sentiment 

The New Zealand Dollar (NZD) trended slightly lower in overnight trade, as a small shift in risk sentiment dampened the appeal of the risk-sensitive ‘Kiwi’. 

Samuel Birnie

Contact Samuel Birnie