Pound (GBP) resists losses despite financial stability fears
The pound (GBP) found limited success yesterday, firming against its weaker rivals but stalling elsewhere, amid a lack of UK economic data.
Sterling’s upside potential may have been limited by the Bank of England’s (BoE) latest Financial Stability Review, which warned that this year’s wave of elections globally could potentially destabilise the UK’s financial system.
This morning, the UK’s final GDP reading for the first quarter was revised higher, from 0.6% to 0.7%. Could this provide the pound with support today?
Euro (EUR) firms despite weaker data
The euro (EUR) shrugged off a modest decline in Eurozone economic sentiment on Thursday as signs of rising consumer inflation expectations lent the single currency some support.
In addition, EUR benefitted from its strong negative correlation with a weakening US dollar (USD).
Turning to today, the single currency may be muted as investors await the first round of the French legislative election on Sunday.
US dollar (USD) stumbles amid signs of slowing economy
The US dollar fell yesterday as declining US Treasury yields and some disappointing domestic data pressured the ‘greenback’.
Although US durable goods orders exceeded expectations in May, the release still pointed to sluggish demand over the past two months. Meanwhile, new initial jobless claims held close to a ten-month high.
Today, all eyes are on the latest core PCE price index – the Federal Reserve’s preferred measure of inflation. Could an expected cooling of inflation see the US dollar end the week on a sour note?
Canadian dollar (CAD) slips despite stronger oil prices
An uptick in oil prices failed to lift the crude-linked Canadian dollar (CAD) on Thursday as CAD’s correlation with USD and an unexpected decline in Canadian average weekly earnings both pressured the ‘loonie’.
Canada’s latest GDP figures are due out this afternoon. Could economic growth in April and May lend the ‘loonie’ support today?
Australian dollar (AUD) sees delayed decline following RBA comments
The Australian dollar (AUD) slumped when Australian markets opened overnight as investors responded to dovish comments made by Reserve Bank of Australia (RBA) Deputy Governor Andrew Hauser yesterday morning.
New Zealand dollar (NZD) slips on AUD correlation
The New Zealand dollar (NZD) was dragged down by its positive correlation with AUD last night, while declining commodity prices also hobbled NZD.