Pound Under Pressure as Northern Ireland Protocol Back in Focus

Pound (GBP) Pressured by Brexit Worries

The Pound (GBP) was muted yesterday, moving down or sideways against its major rivals, as renewed Brexit fears weighed on the UK currency.

After recent reports that the government may be preparing to scrap the Northern Ireland protocol as early as next week, Boris Johnson restated that the UK was willing to abandon the agreement. As such a move could hurt the UK economy at a perilous time, Sterling slipped.

This morning, the Pound could find itself on the defensive once again. UK GDP unexpectedly contracted in March, fuelling fears that a recession may be on the horizon.

Euro (EUR) Slips as Ukraine Blocks Russia-Europe Gas Pipelines

The Euro (EUR) struggled yesterday, despite hawkish comments from European Central Bank (ECB) officials, as Ukraine said it is cutting some Russian gas flows to Europe.

Ukraine’s gas grid operator said it will shut down two key sections of pipeline that are currently under Russian control, due to ‘interference’ that ‘endangered the stability and safety’ of the Ukrainian system. The move could cause more economic pain in the Eurozone, thereby putting pressure on the single currency.

With no Eurozone data out today, EUR may continue to be influenced by events in Ukraine.

US Dollar (USD) Softens as Market Mood Improves

The US Dollar (USD) lost ground yesterday as a bullish market mood saw investors shun the safe-haven ‘Greenback’ for riskier currencies.

USD briefly spiked after US inflation beat forecasts. However, as short-term traders cashed in on the spike, the US Dollar shed these gains and remained down on the day.

The latest PPI and initial jobless claims reports could have an impact on USD today. Otherwise, risk appetite may be the defining factor.

Canadian Dollar (CAD) Gains amid Rising Oil Prices

The Canadian Dollar (CAD) climbed yesterday as a steady uptick in oil prices boosted the crude-linked currency.

Aside from movements in the oil market, a speech from Bank of Canada (BoC) Deputy Governor Toni Gravelle could affect CAD today.

Australian Dollar (AUD) Slips as Sentiment Sours

The risk-sensitive Australian Dollar (AUD) fell overnight amid bearish trade.

New Zealand Dollar (NZD) Drops amid Cautious Trade

Likewise, the New Zealand Dollar (NZD) declined as the risk-off mood sapped the appeal of the riskier ‘Kiwi’.

Samuel Birnie

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