US dollar softens as market mood improves

Pound (GBP) fluctuates amid mixed factors

The pound (GBP) initially stumbled yesterday before regaining ground in the afternoon and managing to rise against its weaker peers.

The choppy movement came as cautious optimism for the UK economy was offset by growing bets on a June interest rate cut from the Bank of England (BoE).

This morning, the UK’s latest labour market report showed mixed results. While wage growth held strong, unemployment rose to an eight-month high. This could lead to choppy movement in the pound.

Euro (EUR) unclear amid lack of data

The euro (EUR) also faced unclear movement yesterday, amid a lack of Eurozone economic data.

While EUR’s negative correlation with a weaker US dollar (USD) cushioned the common currency, the lack of data left the euro unable to press the advantage.

Looking ahead, Germany’s ZEW economic sentiment index, due out this morning, could boost the euro. Forecasters expect to see improving morale in the Eurozone’s largest economy.

US dollar (USD) softens amid risk-on trade

The US dollar weakened yesterday as an improving market mood sapped demand for the safe-haven currency.

Meanwhile, a slight decline in US Treasury yields added to the pressure on USD.

Turning to today, we have the latest US producer price inflation figures and a speech from Federal Reserve Chair Jerome Powell. Could an uptick in PPI and hawkish comments boost the ‘greenback’?

Canadian dollar (CAD) falls despite stronger oil prices

Rising oil prices failed to support the crude-linked Canadian dollar (CAD) yesterday, as the currency’s strong positive correlation with the US dollar undermined its appeal.

Canadian economic data is in short supply today, potentially leaving the ‘loonie’ to be driven by oil prices.

Australian dollar (AUD) dented by souring mood

The Australian dollar (AUD) stumbled overnight as a souring market mood dented the risk-sensitive currency’s appeal. However, AUD has bounced back this morning.

New Zealand dollar (NZD) volatile amid lack of data

The New Zealand dollar (NZD) fluctuated last night, without a clear catalyst for the movement, but like the ‘Aussie’ has managed to make gains this morning.

Samuel Birnie

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