Pound Stumbles as Income Squeeze Tightens on ‘Bleak Friday’

Pound (GBP) Slips as UK Bills Rise

The Pound (GBP) fell against the majority of its peers at the end of last week as ‘Bleak Friday’ put the UK’s cost-of-living crisis at the forefront of GBP investors’ minds.

On Friday, the UK energy price cap rose by a whopping 54%, while council tax, water bills, and other costs also rose. Britons are facing a ‘historic shock to real incomes‘ this year, which could smother the UK’s economic growth.

Bank of England (BoE) Governor Andrew Bailey will deliver a speech later this morning. Bailey’s downbeat rhetoric dented GBP last week. Will he hurt Sterling by striking a similar tone today?

Euro (EUR) Slips on Manufacturing Miss

The Euro (EUR) ticked lower through Friday’s trade after the Eurozone’s and Germany’s final manufacturing PMIs printed below the flash results.

Skyrocketing inflation seemed to have little effect on EUR exchange rates, despite surging from 5.9% to 7.5%. Meanwhile, a modestly upbeat mood in European markets limited EUR’s losses.

The Euro faces mixed factors today. Germany’s trade surplus printed above forecasts, which could boost the single currency. However, reports of a ‘deliberate massacre’ of civilians in Ukraine by Russian soldiers may cause consternation among EUR investors.

US Dollar (USD) Rebounds as Unemployment Rate Drops

The US Dollar (USD) initially slipped on Friday as a bullish market mood dented demand for the safe-haven ‘Greenback’.

However, it bounced back in the afternoon following strong US labour market figures. The US economy added 431,000 payrolls in March while the unemployment rate dropped from 3.8% to 3.6%.

Looking ahead, an expected contraction in US factory orders could dent USD this afternoon.

Canadian Dollar (CAD) Directionless despite Strong PMI

The oil-sensitive Canadian Dollar (CAD) wavered without a clear direction on Friday as crude prices wobbled in a narrow range. Canada’s above-expected manufacturing PMI did little to boost the ‘Loonie’.

With no notable Canadian data out today, oil prices could drive movement in CAD.

Australian Dollar (AUD) Firms amid Risk-On Mood

The Australian Dollar (AUD) ticked higher overnight as an upbeat sentiment boosted the appeal of the risk-sensitive ‘Aussie’.

New Zealand Dollar (NZD) Gains in Risk-Positive Trade

The New Zealand Dollar (NZD) also edged higher in overnight trade, with the risk-linked ‘Kiwi’ rising amid the bullish market mood.

Samuel Birnie

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