GBP/USD Strikes One-Month Low amid UK Private Sector Slowdown

Pound (GBP) Limited by Mixed PMI Data

The Pound (GBP) saw limited trade against most peers yesterday, as lacklustre private indexes sapped sentiment.

Both services and manufacturing indexes dipped below forecasts, reflecting slowdown in the private sector. However, the pressure on Sterling was later alleviated by an improved economic forecast by the International Monetary Fund (IMF).

This morning, the release of the UK’s latest CPI figures reported core inflation jumped to 6.8% in April, far higher than expected. Sterling is rallying on this as it may imply further rate hikes.

Euro (EUR) Cushioned by Bearish Trade

The Euro (EUR) accrued some support yesterday, as its safer stature allowed it to gain ground amidst the risk-averse market mood.

However, these gains were undermined by downbeat PMI readings. These showed that the Eurozone’s private sector appeared to slow down in May.

This morning, the Ifo business climate index is due to print. With business sentiment expected to tick down in German, EUR could struggle for support.

US Dollar (USD) Capped amid Growing Private Sector Split

The US Dollar (USD) trimmed its initial gains yesterday, as the latest US PMIs indicated a growing split in the private sector.

While growth in the US service index climbed to a 13-month high, the manufacturing index slipped further and fell into contractionary territory.

Tonight, the latest Federal Open Market Committee (FOMC) meeting minutes should be published. Could hawkish indications boost USD?

Canadian Dollar (CAD) Climbs as Oil Prices Soar

The Canadian Dollar (CAD) climbed yesterday, as oil prices soared amid renewed optimism over US debt ceiling talks.

Oil prices may continue to drive the ‘Loonie’ today, due to a lack of impactful data releases.

Australian Dollar (AUD) Slips amid Souring Mood

The risk-sensitive Australian Dollar (AUD) weakened in overnight trade, as a souring market mood dragged the ‘Aussie’ lower.

New Zealand Dollar (NZD) Crumbles amid Dovish RBNZ Hike

The New Zealand Dollar (NZD) nosedived overnight as the Reserve Bank of New Zealand (RBNZ) delivered a dovish 25bps hike.

John Mulcahey

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