Pound (GBP) weakens as UK unemployment rises
The pound (GBP) fluctuated lower yesterday following mixed jobs data. Although wage growth beat forecasts, UK unemployment rose to an eight-month high.
In addition, Bank of England (BoE) Chief Economist Huw Pill said it was ‘not unreasonable’ to expect that the bank would cut interest rates over the summer.
Amid an absence of UK economic data today, BoE rate cut bets could pressure GBP.
Euro (EUR) supported by uptick in German morale
The euro (EUR) edged higher during yesterday’s session, following the publication of Germany’s latest ZEW economic sentiment index.
Morale in the Eurozone’s largest economy continued to improve this month and at a faster pace than expected, amid hopes for a robust German economic recovery.
Coming up, a forecast uptick in Eurozone industrial production in March could provide a boost for the euro later this morning.
US dollar (USD) slips following mixed PPI data
The US dollar (USD) fell yesterday, after a downward revision to March’s producer price inflation figures raised hopes for a softer consumer price index this afternoon.
Some slightly hawkish comments from Federal Reserve Chair Jerome Powell seemed to help limit USD’s losses, as the Fed chief said it may ‘take longer than expected’ to tame inflation.
Coming up, the latest US CPI is in the spotlight. Signs of sticky inflation in April could see the US dollar rocket higher.
Canadian dollar (CAD) steady despite softening oil prices
The Canadian dollar (CAD) traded sideways on Tuesday, with the commodity-sensitive currency appearing unfazed by a drop in oil prices.
Turning to today, we could see CAD’s positive correlation with the US dollar propel the ‘loonie’ higher if US inflation impresses.
Australian dollar (AUD) climbs following budget announcement
The Australian dollar (AUD) strengthened overnight as markets responded to the Australian federal budget announcement. Ratings agencies said the budget could fuel inflation, which in turn could mean the Reserve Bank of Australia (RBA) keeps interest rates higher for longer.
New Zealand dollar (NZD) firms in tandem with AUD
The New Zealand dollar (NZD) also rose overnight, with the ‘kiwi’ enjoying an improvement in market mood and the currency’s positive correlation with the ‘Aussie’.