Pound (GBP) subdued despite strong PMI
The pound (GBP) struggled against its stronger peers on Friday, despite the UK’s final services PMI confirming a strong expansion in April.
Bank of England (BoE) rate cut bets may have exerted some pressure on Sterling. Although markets expect a rate cut in August, some speculated on Friday that the bank could begin loosening its policy as early as June.
Turning to today, market-moving UK data is thin on the ground. Therefore, Sterling may struggle to find a clear direction.
Euro (EUR) climbs amid USD selloff
The euro (EUR) gained ground on Friday thanks to its strong negative correlation with a weakening US dollar (USD).
In addition, new data showed that the Eurozone unemployment rate held at a record low in March, adding to EUR’s upside.
An unexpected decline in German factory orders is pressuring the euro this morning, although strong German exports are cushioning the downside. Later this morning an expected recovery in Eurozone retail sales could support EUR.
US dollar (USD) plunges as payrolls miss forecasts
The US dollar slumped to multi-week lows on Friday after the latest non-farm payrolls report showed a sharper-than-expected slowdown in US jobs creation last month.
USD exchange rates managed to bounce back as investors bought the dip, despite a weaker ISM services PMI, although the ‘greenback’ still ended the day’s session lower overall.
Looking forward, Federal Reserve policymaker Neel Kashkari is due to speak this afternoon. Could hawkish comments boost the US dollar?
Canadian dollar (CAD) falls alongside USD and oil
The Canadian dollar (CAD) fell against many of its peers on Friday as the currency was dragged lower by its correlations with the US dollar and oil prices, as both USD and crude declined.
Today, Canada’s latest Ivey PMI is due out. Could an expansion in Canadian business activity last month lift the ‘loonie’?
Australian dollar (AUD) slides as RBA leaves rates unchanged
The Australian dollar (AUD) fell last night after the Reserve Bank of Australia (RBA) left its policy untouched and indicated that interest rates may have peaked.
New Zealand dollar (NZD) flat amid calm markets
The risk-sensitive New Zealand dollar (NZD) was subdued overnight as a tepid market mood and lack of New Zealand economic data left the ‘kiwi’ stuck in a narrow range.