Pound (GBP) Propped Up by GDP Report
The Pound (GBP) found some support on Friday after UK GDP exceeded forecasts. The British economy expanded 0.1% in the fourth quarter of 2022, beating previous estimates that the economy had stalled.
Despite this upbeat data, Sterling saw some downward pressure in the afternoon. Investors repositioned in some end-of-quarter trade, injecting volatility into the currency market.
Notable UK economic data is in short supply today, with the final manufacturing PMI unlikely to prompt significant movement. As a result, Sterling may trade without a clear direction.
Euro (EUR) Slips following Flash CPI
The Euro (EUR) weakened on the last day of March following the Eurozone’s latest inflation rate reading. Although core inflation edged up, as expected, headline inflation eased more than forecast.
Meanwhile, a strengthening US Dollar (USD) dented the Euro due to the currencies’ negative trading correlation.
Aside from the final manufacturing PMI, Eurozone data is sparse today. This could see EUR particularly susceptible to USD movement and Russia-Ukraine news.
US Dollar (USD) Marches Higher despite Headwinds
The US Dollar managed to gain ground on Friday, despite a cheery market mood and softer inflation data.
The US core PCE price index – the Federal Reserve’s preferred measure of inflation – unexpectedly ticked lower from 4.7% to 4.6%. Nevertheless, USD moved higher amid a flurry of currency trading activity.
This afternoon, the American ISM manufacturing PMI is out. The ‘Greenback’ could fall it if shows a deepening contraction in the sector.
Canadian Dollar (CAD) Rises following Upbeat GDP
The Canadian Dollar (CAD) firmed on Friday as strong Canadian GDP and rising oil prices boosted the commodity-linked ‘Loonie’.
Turning to today, Canada’s latest manufacturing PMI could impact CAD exchange rates. Will the Canadian Dollar dip if factory activity slows as expected?
Australian Dollar (AUD) Wavers on Mixed Data
The Australian Dollar (AUD) saw mixed movement overnight. A stronger-than-expected manufacturing PMI aided the ‘Aussie’ while a cooldown in the monthly inflation gauge weighed on the currency.
New Zealand Dollar (NZD) Stumbles as Mood Darkens
The New Zealand Dollar (NZD) fell during overnight trade as the market mood soured, sapping demand for the riskier ‘Kiwi’.