US Dollar (USD) Rallies as Strong Data Lifts Fed Expectations
After a weak start to the session, the US Dollar (USD) then surged higher on Thursday afternoon.
The final US GDP growth rate for the first quarter was revised significantly higher, while jobless claims printed well below forecasts. Both releases boosted Federal Reserve rate hike bets, triggering a USD rally.
Today brings May’s core PCE price index – the Fed’s favoured measure of inflation. If price pressures remained stubbornly high last month, the ‘Greenback’ could jump.
Pound (GBP) Subdued in Absence of Data
The Pound (GBP) struggled yesterday as a lack of data left the UK currency vulnerable to domestic headwinds.
Growing concerns about the UK’s increasingly bleak outlook pressured GBP. The expected collapse of Thames Water has rattled investors, with the situation raising questions about the state of other indebted suppliers.
This morning, the UK’s final GDP growth rate for the first quarter confirmed that the country avoided a winter recession. Could this provide the Pound with some support today?
Euro (EUR) Stumbles Due to USD Correlation
The Euro (EUR) initially edged higher yesterday in the wake of hawkish European Central Bank (ECB) comments earlier in the week.
However, EUR’s negative trading relationship with a rallying US Dollar scuppered the single currency’s upside. Even a sharper-than-forecast rise in German inflation failed to boost the Euro.
The Eurozone consumer price index is in the spotlight today. Will a forecast rise in core inflation boost ECB hike bets, thereby seeing the Euro strengthen?
Canadian Dollar (CAD) Rebounds amid Oil Price Rise
The oil-linked Canadian Dollar (CAD) fluctuated during yesterday’s trade, initially slipping against some of its peers before bouncing back amid a sharp rise in crude prices and renewed strength in the US Dollar.
Looking ahead, CAD investors will be looking to the latest Canadian GDP data for fresh impetus. A forecast recovery could see the ‘Loonie’ gain ground.
Australian Dollar (AUD) Choppy amid Mixed Chinese PMIs
The Australian Dollar (AUD) fluctuated slightly higher overnight, though failed to make any meaningful recovery, following mixed Chinese PMI surveys.
New Zealand Dollar (NZD) Rises amid Improving Household Morale
The New Zealand Dollar (NZD) firmed during last night’s trade following an unexpected rise in consumer confidence.