Pound (GBP) unclear in absence of data
The pound (GBP) struggled to find a clear direction yesterday as a lack of UK economic data limited the currency’s movements.
Mixed expectations around when the Bank of England (BoE) could cut interest rates also impacted GBP, following Wednesday’s stronger consumer price index and dovish comments from BoE Governor Andrew Bailey.
The pound is struggling this morning after data showed UK retail sales stalled last month. Later today, BoE Deputy Governors Sarah Breeden and Dave Ramsden are due to speak. Any hints on monetary policy could impact the pound.
Euro (EUR) slips as June ECB rate cut looks likely
The euro (EUR) softened yesterday as expectations for a European Central Bank (ECB) rate cut in June.
ECB Vice-President Luis de Guindos clearly signalled that, if the recent inflation trend continues, the bank will start cutting rates at its next meeting in two months’ time. This sapped support for EUR.
However, a stronger-than-expected German PPI reading may lend some support to the single currency this morning.
US dollar (USD) rises alongside US Treasury yields
The US dollar (USD) was buoyed by an uptick in US Treasury yields yesterday amid market expectations that the Federal Reserve will not cut interest rates as aggressively as expected this year.
Better-than-forecast US jobless claims also supported USD, although a cautiously upbeat market mood stifled the safe-haven currency’s potential.
Turning to today, US economic data is in short supply. As a result, risk appetite could drive most movement in the US dollar.
Canadian dollar (CAD) rises as US sanctions spark oil supply fears
The crude-linked Canadian dollar (CAD) firmed yesterday amid concerns that new US sanctions on Venezuela and Iran could push oil prices higher in the coming months.
Expect movement in the ‘loonie’ to remain tied to oil price dynamics today.
Australian dollar (AUD) slips in risk-off trade
The Australian dollar (AUD) trended lower overnight on Thursday as a souring market mood sapped demand for the risk-sensitive currency.
New Zealand dollar (NZD) dented by bearish trading conditions
The New Zealand dollar (NZD) was also knocked in overnight trade as a result of risk-off market sentiment.