Pound (GBP) knocked by BoE Bailey comments
The Pound (GBP) retreated at the end of last week in response to comments from Bank of England (BoE) Governor Andrew.
Hot off the BoE’s dovish interest rate decision earlier in the week, Bailey suggested that interest rate cuts will be ‘in play’ at future BoE policy meetings.
Sterling may extend this selloff into the start of this week if more GBP investors start to price in a June rate cut from the BoE.
Euro (EUR) pressured despite upbeat German business sentiment
The Euro (EUR) also weakened on Friday as a result of European Central Bank (ECB) rate cut bets.
Coupled with the pressure stemming from the euro’s negative correlation with the US dollar, this was more than enough to offset a stronger-than-expected pick up in German business sentiment this month.
Will growing bets on an April interest rate cut leave the euro on the back foot today?
US dollar (USD) soars on easing Fed rate cut bets
The US dollar (USD) closed last week’s session on a positive note as investors trimmed their expectations for the number of interest rate cuts the Federal Reserve may deliver this year.
However, capping the upside in USD exchange rates was a fall in US Treasury yields.
The US dollar may maintain this momentum into this week as well, so long as market risk appetite remains weak.
Canadian dollar (CAD) firms despite oil weakness
The Canadian dollar (CAD) ticked higher on Friday, as the currency’s positive correlation with the US dollar allowed it to shrug off a drop in oil prices.
Australian dollar (AUD) supported by China stimulus hope
The Australian dollar (AUD) ticked higher in overnight trade, supported by comments by Chinese Premier Li Qiang on the possibility of Beijing pursuing more stimulus measures.
New Zealand dollar (NZD) fluctuates amid mixed market mood
The New Zealand dollar (NZD) initially found support in overnight trade amid a cautious optimistic market mood, before shedding most of these gains by the start of the European session as risk appetite began to sour again.