US dollar ticks higher amid souring mood

Pound (GBP) undermined by dovish BoE comments

The pound (GBP) softened against some of its rivals yesterday after Bank of England (BoE) policymaker Megan Greene said inflation persistence in the UK is waning.

However, Greene also said she would need to see evidence that inflation is sustainably under control before voting for an interest rate cut. This tempered GBP’s losses.

This morning, BoE official Catherine Mann is due to speak. Any indication that she could support an interest rate cut in June would likely drive GBP lower.

Euro (EUR) mixed in absence of data

The euro (EUR) was mixed yesterday as a lack of Eurozone data left the currency without a clear direction.

While a risk-off mood supported the safe-haven euro, EUR’s strong negative correlation with a rising US dollar (USD) exerted some pressure on the single currency.

The only Eurozone data due out today is the finalised consumer price index for April. Barring a deviation from the preliminary figures, the CPI may not prompt much movement.

US dollar (USD) regains ground amid risk-off trade

The US dollar rose yesterday, recovering some of Wednesday’s losses, as a gloomy mood and rising US Treasury yields boosted USD demand.

The latest initial jobless claims figure also supported the ‘greenback’. Although claims came in slightly above forecasts, USD investors seemed relieved that the number was lower than the previous week.

Looking ahead, a speech from Federal Reserve official Christopher Waller could impact USD this afternoon. Any dovish remarks might weigh on the ‘greenback’.

Canadian dollar (CAD) inches higher alongside oil

The commodity-linked Canadian dollar (CAD) traded in tandem with oil prices yesterday. Crude was initially muted, but a rise in prices in the afternoon lifted CAD exchange rates.

Canadian data remains in short supply today. As a result, oil prices and USD movement could continue to drive the ‘loonie’.

Australian dollar (AUD) slips amid softening RBA bets

The Australian dollar (AUD) stumbled overnight as an ongoing pullback in bets on another Reserve Bank of Australia (RBA) interest rate hike undermined the ‘Aussie’.

New Zealand dollar (NZD) wobbles despite hotter PPI data

The New Zealand dollar (NZD) initially edged higher last night thanks to stronger producer price inflation figures. However, NZD’s positive correlation with AUD ultimately saw the ‘kiwi’ waver.

Samuel Birnie

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