Euro Fluctuates in Response to Lacklustre Eurozone GDP, Economic Sentiment Releases 

Pound (GBP) Fluctuates amid Mixed Market Sentiment 

The Pound (GBP) firmed on Friday’s session as a risk-on mood among European investors boosted the risk-sensitive UK currency. 

However, a large portion of these gains were subsequently erased on Monday as sentiment soured again following a flash crash in European trade.  

Unless it surprises markets, the final manufacturing PMI from the UK is unlikely to cause much movement today. Instead, GBP will likely trade on risk sentiment and domestic economic news. 

Euro (EUR) Unsteady as GDP Slows and Inflation Rises 

The Euro (EUR) was volatile on Friday, initially slipping after some troubling data. GDP growth in the Eurozone unexpectedly slowed in the first quarter of this year, while inflation edged up, stoking fears about the fragility of the bloc’s economy. 

The single currency was able to rise against some of its weaker peers in the afternoon, however, without a clear catalyst for the movement. 

A disappointing fall in Eurozone economic sentiment then left the Euro on the back foot at the start of this week. 

An expected drop in the Eurozone unemployment rate could bolster the Euro today ahead of a speech by European Central Bank (ECB) President Christine Lagarde. How will the ECB chief respond to Friday’s data? 

US Dollar (USD) Seesaws in Fluctuating Trade Sentiment 

The US Dollar (USD) eased lower at the start of Friday’s session as some USD profit-taking and a risk-on mood saw the safe-haven currency slip. 

The ‘Greenback’ was able to recover some ground in the afternoon after personal spending and income beat forecasts. However, the core PCE price index – the Federal Reserve’s preferred measure of inflation – unexpectedly eased, which may have capped USD’s gains. 

The US Dollar then extended this recovery on Monday as risk-off flows buoyed the currency. 

Looking ahead, the US JOLTs job openings and factory orders are in focus. With economists expecting positive result from both, USD could climb. 

Canadian Dollar (CAD) Stumbles despite Strong GDP 

The Canadian Dollar (CAD) wavered lower through Friday’s session, despite Canadian GDP exceeding forecasts. The country’s economy grew by 1.1% in February, versus the expected 0.8%. Nevertheless, CAD slipped against many of its peers. 

Turning to today, could a speech from Bank of Canada (BoC) Senior Deputy Governor Carolyn Rogers boost CAD exchange rates? 

Australian Dollar (AUD) Firms on Stronger-than-Expected RBA Rate Hike 

The Australian Dollar (AUD) jumped overnight on Monday, as AUD investors welcomed the Reserve Bank of Australia’s (RBA) larger-than-expected interest rate hike and hawkish forward guidance.  

New Zealand Dollar (NZD) Stumbles amid USD Strength  

The New Zealand Dollar (NZD) fell back in overnight trade as a stronger US Dollar sapped market risk appetite, with NZD investors also reluctant to make any aggressive bets ahead of this evening’s unemployment figures. 

Samuel Birnie

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