Pound (GBP) Recoups Losses on Hawkish BoE Rhetoric
The Pound (GBP) was rocky yesterday as UK politics remains mired in the ‘partygate’ scandal. The political turbulence caused concern for GBP investors.
Sterling was able to regain ground in the afternoon however, turning positive against some of its weaker peers, after Bank of England (BoE) policymaker Catherine Mann suggested that a 50-bps rate rise was possible at the bank’s next meeting.
The Pound faces headwinds this morning after UK retail sales shrank by more than expected due to the cost-of-living crisis. Next up are the flash PMIs for April before BoE Governor Andrew Bailey speaks later this afternoon.
Euro (EUR) Struggles to Maintain ECB-Fuelled Rally
The Euro (EUR) initially surged higher yesterday after two European Central Bank (ECB) policymakers signalled that a more hawkish stance from the ECB could be imminent. These remarks reinforced comments made by two other ECB officials on Wednesday.
However, a slight downward revision to the Eurozone inflation rate stopped EUR’s rally in its tracks. In addition, a resurgent strength in the US Dollar (USD) stole some of the Euro’s gains.
As well as the flash April PMIs this morning, EUR investors are waiting for a speech from ECB President Christine Lagarde. Will the ECB chief echo her colleagues’ recent hawkish rhetoric?
US Dollar (USD) Rebounds on Fed Rate Hike Bets
The safe-haven US Dollar began yesterday’s session on the back foot amid a lack of US economic data and an improving market mood.
However, USD rallied in the afternoon. Strong jobs data, rising US Treasury yields, and more hawkish comments from Federal Reserve Chair Jerome Powell all buoyed the ‘Greenback’.
This afternoon the S&P Global PMIs could influence USD. Although they’re not as impactful in the US as the ISM surveys, they may still cause some movement.
Canadian Dollar (CAD) Stumbles amid Lack of Trading Impetus
The Canadian Dollar (CAD) slipped against most of its peers yesterday as a muted oil market and lack of Canadian data left the ‘Loonie’ open to losses.
An expected decline in retail sales this afternoon could prompt more CAD selling. Oil prices will also likely influence the crude-linked currency.
Australian Dollar (AUD) Dips as Risk Appetite and Commodities Retreat
The Australian Dollar (AUD) fell in overnight trade, despite Australia’s PMIs unexpectedly improving. The downside came as an anxious market mood and a pullback in commodity prices weighed on the risk-sensitive, resource-linked currency.
New Zealand Dollar (NZD) Slips amid Market Sell-Off
Likewise, the New Zealand Dollar (NZD), which is also a risk-sensitive commodity currency, lost ground amid the sell-off in equity and commodity markets.