Pound, Euro and US Dollar Choppy amid Shifting Market Mood

Pound (GBP) Wavers as Income Crunch Fears Remain

The Pound (GBP) wobbled yesterday as cost-of-living concerns kept the currency under pressure.

The latest data from the British Retail Consortium (BRC) showed that retail sales declined 1.7% year on year in April. This added to fears that the fall in real incomes in the UK is hammering consumer spending.

In the absence of UK data today, domestic economic news may drive most movement in Sterling.

Euro (EUR) Struggles despite German Data Beating Forecasts

The Euro (EUR) was muted yesterday as economic sentiment in Germany remained low, despite printing above expectations.

Additionally, a gloomy mood around the Ukraine crisis hurt EUR. Avril Haines, the US Director of National Intelligence, warned that the conflict is becoming a ‘war of attrition’ and that Russia might resort to ‘more drastic means’.

This morning, European Central Bank (ECB) President Christine Lagarde is delivering a speech. Any hints at future monetary policy could impact the single currency.

US Dollar (USD) Rebounds after Risk-On Slip

The US Dollar (USD) had mixed success yesterday, initially dipping as an improving market mood saw some investors ditch the safe-haven currency.

The market mood then began to sour in the afternoon, helping USD rise. In addition, comments from Federal Reserve policymaker John Williams boosted the currency. Williams said that the Fed will move ‘expeditiously’ to normalise interest rates and that the US economy should ’continue to show strength and resilience’.

The latest US CPI is in focus today. Economists expect inflation to have eased in April. Could such a result temper expectations of highly aggressive action from the Fed?

Canadian Dollar (CAD) Firms despite Wavering Oil Prices

The Canadian Dollar (CAD) ticked higher against many of its peers yesterday, despite some choppy trade in the oil market, without a clear catalyst for the movement.

Amid a lack of Canadian data today, changes in the price of crude could affect the commodity-linked ‘Loonie’.

Australian Dollar (AUD) Rises despite Consumer Confidence Drop

The Australian Dollar (AUD) edged higher in overnight trade, despite a larger-than-expected drop in Australian consumer confidence.

The upside came amid a modestly risk-on mood and an upbeat result from China’s latest CPI.

New Zealand Dollar (NZD) Ticks Higher as Risk Appetite Improves

The New Zealand Dollar (NZD) also made modest gains overnight, as a slight recovery in the Asian market mood buoyed the risk-sensitive ‘Kiwi’.

Samuel Birnie

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