US dollar slides to one-month low as US inflation cools

Pound (GBP) buoyed by risk-positive trade

The pound (GBP) rose against its safer peers yesterday as a bullish market impulse boosted the increasingly risk-sensitive UK currency.

One factor cheering markets was the latest US inflation figures, which showed a cooldown in April and fuelled bets on coming Federal Reserve interest rate cuts.

With market-moving UK data in short supply today, risk sentiment could drive GBP movement once again.

Euro (EUR) rises despite upbeat data

The euro (EUR) gained ground against many of its peers yesterday following some upbeat Eurozone data.

Industrial production in the bloc exceeded forecasts in March, rising by 0.6% rather than the expected 0.5%. In addition, the second estimate for Eurozone GDP growth confirmed a 0.3% expansion in the first quarter.

Eurozone data releases thin out today. This could leave the euro to trade in a wide range during the session ahead.

US dollar (USD) slumps as US inflation declines

The US dollar (USD) slumped to a one-month low yesterday, after cooling US inflation in April boosted Federal Reserve rate cut bets.

This was compounded by weaker-than-forecast US retail data, as domestic sales unexpectedly stalled in April.

Turning to today, the latest US initial jobless claims data is the focus for USD investors. After last week’s higher-than-forecast figure, any signs that the US labour market is cooling could hurt the ‘greenback’.

Canadian dollar (CAD) falls alongside oil and USD

The commodity-linked Canadian dollar (CAD) weakened yesterday as falling oil prices and a declining US dollar both weighed on the ‘loonie’.

Crude prices and USD movement could continue to drive CAD exchange rates today, amid a lack of Canadian economic data.

Australian dollar (AUD) trims gains as unemployment rises

After climbing yesterday evening amid the risk-on market mood, the Australian dollar (AUD) trimmed its gains overnight as Australia’s unemployment rate leapt from 3.9% to 4.1% in April.

New Zealand dollar (NZD) eases off two-month high on profit-taking

The New Zealand dollar (NZD) struck two-month highs against some peers last night as risk-positive trade boosted the currency, before some profit-taking trimmed NZD’s gains.

Samuel Birnie

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