Pound (GBP) underpinned by rate cut bet pullback
The pound (GBP) enjoyed some success yesterday as an ongoing pullback in Bank of England (BoE) interest rate cut bets supported Sterling.
However, GBP’s gains were capped by a slump in UK retail sales trade reported by the Confederation of British Industry (CBI).
The week ends with UK economic data in short supply. As a result, the pound could struggle to find a clear direction.
Euro (EUR) mixed despite hawkish ECB comments
The euro (EUR) faced mixed movement yesterday, despite hawkish comments from two European Central Bank (ECB) policymakers.
Isabel Schnabel and Madis Muller both indicated that the pace of cutting interest rates may be slower than markets are currently pricing in. This lent the single currency some support, but many EUR investors shrugged off the remarks.
This morning, ECB Vice-President Luis de Guindos is delivering a speech. If he strikes a dovish tone, the single currency could stumble.
US dollar (USD) rocked by weaker GDP
The US dollar (USD) faced volatility on Thursday after the latest US GDP growth rate showed a sharper-than-expected slowdown in the American economy in the first three months of 2024.
US GDP slowed from 3.4% to 1.6% in the first quarter, lower than the forecast 2.5% growth. USD spiked as the release soured the market mood, before quickly retracing its steps and hitting some of its lowest levels in two weeks.
Today, the focus is on the latest core PCE price index. If the Federal Reserve’s preferred measure of inflation shows a cooldown last month, USD exchange rates could fall further.
Canadian dollar (CAD) slides amid declining oil prices
The crude-linked Canadian dollar (CAD) fell yesterday as a decline in oil prices dragged the currency lower.
With market-moving Canadian economic data thin on the ground today, oil price dynamics could continue to drive the ‘loonie’.
Australian dollar (AUD) climbs as PPI beats forecasts
The Australian dollar (AUD) strengthened overnight after the latest producer price index exceeded expectations, fuelling speculation that the Reserve Bank of Australia (RBA) may keep interest rates higher for longer.
New Zealand dollar (NZD) buoyed by AUD correlation
The New Zealand dollar (NZD) also rose overnight, with the ‘kiwi’ being boosted by its positive correlation with the ‘Aussie’.