Pound (GBP) Climbs on Positive Jobs Data
The Pound (GBP) jumped higher yesterday, hitting two-week highs against the US Dollar (USD) and the Euro (EUR), following an upbeat labour market report.
The UK unemployment rate beat forecasts, falling to a 48-year low of 3.7%. Additionally, average earnings (including bonuses) rose by a huge 7%, with some investors hoping that strong wage growth would help to ease the income squeeze hitting UK households.
This morning, the Pound has slipped after UK inflation jumped from 7% to 9% in April. While higher inflation may force the Bank of England (BoE) to raise rates, it’s also hammering earnings and threatening to trigger a recession.
Euro (EUR) Strengthens as GDP Beats Forecasts
The Euro gained ground during yesterday’s trade after Eurozone GDP growth beat forecasts.
The GDP growth rate for the first quarter of this year printed at 0.3%, beating previous estimates of 0.2%. This boosted the single currency across the board, also helping it recoup earlier losses against the Pound.
Today’s finalised Eurozone inflation rate could cause some movement in the Euro, particularly if it surprises markets. With the European Central Bank (ECB) seemingly close to raising interest rates, EUR investors will be keen to see the CPI results.
US Dollar (USD) Weaker amid Risk-On Trade
The US Dollar stumbled yesterday as a risk-positive market mood saw traders abandon the safe-haven currency for riskier investments.
Strong US data in the afternoon helped the ‘Greenback’ regain some ground. US retail sales grew by 0.9%, as forecast, while industrial production increased by 1.1%, beating expectations of 0.5%.
In the absence of any market-moving US data today, risk appetite could drive most movement in the US Dollar.
Canadian Dollar (CAD) Slips despite Strong Crude Prices
The Canadian Dollar (CAD) softened through yesterday’s trade, despite stronger oil prices, which often support the commodity-linked ‘Loonie’.
In today’s session, CAD investors will be focused on Canada’s latest inflation rate reading. Economists expect the CPI to hold at 6.7%. Could markets be surprised?
Australian Dollar (AUD) Slips on Disappointing Wage Data
The Australian Dollar (AUD) wavered lower overnight after the latest Australian wage data came in lower than forecast, putting pressure on the ‘Aussie’.
New Zealand Dollar (NZD) Wobbles as Risk Appetite Shifts
The risk-sensitive New Zealand Dollar (NZD) fluctuated in a narrow range overnight as a shifting market mood caused some choppy trade.