Pound (GBP) subdued by rate cut expectations
The pound (GBP) traded sideways on Tuesday as investors remained focused on the prospect of a Bank of England (BoE) interest rate cut.
With markets increasingly convinced the BoE will lower rates by 25bps in May, demand for Sterling remained limited.
In the absence of fresh UK economic releases, the pound will likely follow shifts in broader market sentiment today.
Euro (EUR) supported by risk aversion
The euro (EUR) edged higher during yesterday’s session, benefitting from safe-haven inflows amid a cautious market mood.
However, the euro’s upside was curbed by a disappointing Eurozone sentiment index, which showed consumer morale sank to its lowest level since November 2023.
Attention now turns to the Eurozone’s Q1 GDP release. If the bloc shows signs of continued growth, the euro may build on its gains.
US dollar (USD) firms on safe-haven demand
The US dollar (USD) strengthened on Tuesday as market jitters drove demand for the safe-haven currency.
USD gains were partially reversed later in the session after weaker-than-expected data on US job openings and consumer sentiment weighed on confidence.
Today’s US GDP release will be centre stage. If preliminary figures indicate a significant slowdown in economic activity, the dollar could face renewed selling pressure.
Canadian dollar (CAD) lifted by political clarity
The Canadian dollar (CAD) posted modest gains on Tuesday after the ruling Liberal party secured re-election, providing a sense of political stability.
However, upcoming GDP figures could dent CAD sentiment, with analysts forecasting a sharp contraction in March due to trade uncertainty linked to US tariffs.
Australian dollar (AUD) climbs on CPI surprise
The Australian dollar (AUD) advanced overnight as stronger-than-forecast first-quarter inflation data reduced the likelihood of near-term interest rate cuts by the Reserve Bank of Australia (RBA).
New Zealand dollar (NZD) dips as business outlook sours
The New Zealand dollar (NZD) drifted lower in overnight trade, dragged down by a sharp slump in business confidence in April.
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