Pound (GBP) Rallies as British GDP Expands
The Pound (GBP) rallied at the end of the week. UK GDP confirmed that the country avoided a winter recession, thereby cheering GBP investors.
Sterling enjoyed further success as the session progressed, with a brightening market mood lifting the increasingly risk-sensitive currency.
Aside from the final manufacturing PMI results, there’s no UK economic data on the calendar for today. This could leave Sterling exposed to risk appetite and domestic headwinds.
Euro (EUR) Finds Support as USD Declines
The Euro (EUR) initially weakened amid a risk-on mood and below-forecast inflation data on Friday.
However, EUR found support in the afternoon thanks to a sharp decline in the US Dollar (USD), with which the Euro is negatively correlated.
Barring any notable revision, the Eurozone’s final manufacturing PMI may not cause much movement during today’s session. Instead, EUR’s negative correlation with the US Dollar could continue to impact the single currency.
US Dollar (USD) Tumbles as Inflation Cools
The US Dollar came under intense pressure on Friday after the core PCE price index – the Federal Reserve’s preferred inflation gauge – unexpectedly cooled.
This saw markets trim bets on further Fed rate increases, sparking a selloff in the US Dollar.
Looking forward, the more impactful ISM manufacturing PMI is due out this afternoon. With factory activity set to have contracted for an eight consecutive month, USD could stumble.
Canadian Dollar (CAD) Drops as GDP Stalls
The Canadian Dollar (CAD) slumped as last week’s session came to an end due to its USD correlation and weaker GDP data. The Canadian economy unexpectedly ground to a halt in April.
Turning to today’s session, Canadian data is absent from the calendar. As a result, CAD’s link to oil prices could drive movement. Will weaker crude prices drag the ‘Loonie’ lower?
Australian Dollar (AUD) Volatile amid Mixed Economic Data
The Australian Dollar (AUD) fluctuated overnight amid mixed economic data. Australia’s manufacturing PMI and inflation gauge printed below forecasts, while China’s manufacturing PMI beat forecasts.
New Zealand Dollar (NZD) Firms amid Risk-On Mood
The New Zealand Dollar (NZD) found some success last night as better-than-forecast Chinese data cheered markets, thereby lifting the risk-sensitive ‘Kiwi’.