Pound (GBP) stumbles amid economic concerns
The pound (GBP) fell yesterday after the OECD slashed its growth forecasts for the UK.
The Paris-based thinktank now expects the UK to be the worst-performing economy in the G7 next year. It also cut its growth forecasts for this year from 0.7% to 0.4%.
The focus for GBP investors today is the UK’s final services PMI. Confirmation of a strong expansion in British service sector activity could lift the pound.
Euro (EUR) slips as factory activity shrinks
The euro (EUR) softened during Thursday’s session after the Eurozone’s final manufacturing PMI confirmed a deepening contraction in Eurozone factory activity.
However, the euro’s strong negative correlation with the US dollar (USD) cushioned EUR in the afternoon as the American currency retreated.
Looking ahead, the Eurozone’s latest jobless rate could drive EUR movement today. If unemployment remains near a record low, the single currency could tick higher.
US dollar (USD) surrenders gains as risk appetite improves
The US dollar initially rose yesterday, with a risk-off mood and some positive jobs data supporting USD.
However, the safe-haven currency relinquished its gains later in the session as a return of risk appetite sapped USD’s appeal.
Two high-impact US data releases are due out today: the non-farm payrolls report and the ISM services PMI. A slowdown in job creation could dent USD, but an expansion in service sector activity could see the ‘greenback’ regain ground.
Canadian dollar (CAD) finds modest gains despite soft trade data
The Canadian dollar (CAD) managed to climb against its weaker rivals yesterday, despite Canadian trade data missing forecasts and oil prices remaining subdued.
Canada’s April services PMI is due out this afternoon. If it shows another contraction in activity, the ‘loonie’ could weaken.
Australian dollar (AUD) holds strong amid risk-positive trade
The Australian dollar (AUD) consolidated its recent gains overnight amid a cheery market mood. However, a downwardly revised Australian services PMI prevented AUD from climbing higher.
New Zealand dollar (NZD) buoyed by upbeat market mood
The New Zealand dollar (NZD) also inched slightly higher last night as a cautiously upbeat mood kept the currency afloat.