Pound (GBP) softens ahead of BoE decision
The pound (GBP) fell against many of its peers yesterday, striking a two-week low against the euro (EUR), as a gloomy mood weighed on the increasingly risk-sensitive currency.
Furthermore, investors seemed unwilling to support Sterling ahead of the Bank of England’s (BoE) upcoming interest rate decision.
Looking ahead, the spotlight today is undoubtedly on the BoE’s policy announcement. While the bank is expected to leave rates unchanged, any indication that a rate cut is on the horizon could weigh on Sterling.
Euro (EUR) firms despite poor German data
The euro enjoyed support during yesterday’s session, as EUR investors brushed off a contraction in German industrial production.
Output in the Eurozone’s largest economy shrank by 0.4% in March. However, this was not as bad as the expected 0.6% decline. Additionally, a risk-off mood supported the safer euro.
The focus today is likely to be a speech from European Central Bank (ECB) Vice-President Luis de Guindos. If he reiterates his view that the bank will cut rates next month, EUR could weaken.
US dollar (USD) firms amid market anxiety
The US dollar (USD) inched higher on Wednesday as a risk-off market mood provided the ‘greenback’ with safe-haven flows.
An uptick in US Treasury yields also lent the American currency modest support.
The latest initial jobless claims figure, due out this afternoon, is the focus for USD investors in the session ahead. Could an uptick in unemployment benefit claims dent the ‘greenback’?
Canadian dollar (CAD) wavers amid choppy oil prices
The crude-linked Canadian dollar (CAD) traded in line with oil prices yesterday, initially trending lower as oil prices fell before recouping some losses during the US trading hours.
Oil prices could continue to impact the ‘loonie’ today in the absence of any new Canadian data. If crude stages a recovery, CAD could strengthen in tandem.
Australian dollar (AUD) wobbles amid mixed mood
The Australian dollar (AUD) wavered overnight as a tepid market mood and lack of Australian data left the currency without a clear trajectory.
New Zealand dollar (NZD) flat in absence of data
The New Zealand dollar (NZD) was also mostly rangebound during last night’s session amid calm trading conditions.