Pound (GBP) softens as data remains scarce
The pound (GBP) fell against many of its peers on Friday as a continued lack of UK economic data left the currency adrift.
With no new data to drive GBP movement, Sterling found itself exposed to losses.
The only UK data due out today is the final manufacturing PMI. Could confirmation that British factory activity returned to growth in May lift the pound?
Euro (EUR) supported by stronger CPI data
The euro (EUR) rose against its weaker rivals on Friday amid a hotter-than-forecast Eurozone consumer price index.
Headline inflation in the bloc accelerated from 2.4% in April to 2.6% in May, lending EUR support. However, some end-of-month volatility stifled the currency’s upside potential.
The Eurozone’s finalised manufacturing PMI is also due this morning. Barring a deviation from the preliminary estimate, the data may have a limited impact on the euro.
US dollar (USD) volatile following inflation report
The US dollar (USD) dropped sharply on Friday after the latest US core PCE price index contained signs that American inflation is easing. On a monthly basis, core inflation rose by 0.2%, lower than the expected 0.3%.
However, with annual inflation holding steady, as expected, USD was able to bounce back from its initial drop, which seemed like a knee-jerk reaction from investors.
Looking ahead, the US ISM manufacturing PMI is due out this afternoon. With economists expecting it to report another contraction in the American manufacturing sector, the ‘greenback’ could struggle.
Canadian dollar (CAD) rocked by weaker GDP reading
The Canadian dollar (CAD) was volatile on Friday as investors reacted to Canada’s latest GDP reading. Although the economy expanded by 0.4% in the first quarter, this was below the expected 0.6% growth. In addition, the previous quarter was revised down from 0.2% to 0%.
Canada’s manufacturing PMI is expected to show a very modest expansion in activity last month. Could this be enough to lift CAD exchange rates?
Australian dollar (AUD) slips alongside key commodity prices
The Australian dollar (AUD) stumbled overnight as a cautious mood and weaker commodity prices pressured the ‘Aussie’.
New Zealand dollar (NZD) unclear amid absence of data
The New Zealand dollar (NZD) was volatile last night, initially rising before surrendering its gains as a lack of New Zealand data left the ‘kiwi’ without a clear direction.