Pound (GBP) directionless amid political concerns
The pound (GBP) lacked direction on Friday as markets reacted to early results from the UK’s local elections.
Sterling sentiment was dampened by a weaker-than-anticipated showing for Labour, raising fears about internal divisions and broader implications for party leadership and government stability.
In the first half of this week, the pound may remain rangebound as investors await Thursday’s Bank of England (BoE) interest rate decision.
Euro (EUR) climbs on hot inflation data
The euro (EUR) advanced on Friday following the release of stronger-than-expected inflation figures from the Eurozone.
April’s flash consumer price index showed both headline and core readings coming in above forecasts, prompting a pullback in European Central Bank (ECB) rate cut expectations and lifting the euro.
Looking to today, the Eurozone’s producer price index release could influence EUR. A weaker reading for March may apply modest downside pressure.
US dollar (USD) weakens amid improved risk appetite
The US dollar (USD) softened at the end of last week’s session as investor appetite for riskier assets limited demand for the safe-haven currency.
Offsetting these losses somewhat was the latest non-farm payrolls release, which revealed a stronger-than-forecast rise in employment.
With the Federal Reserve due to deliver its interest rate verdict tomorrow, USD movement may be relatively subdued today.
Canadian dollar (CAD) dips on falling oil prices
The Canadian dollar (CAD) stumbled on Friday as declining crude prices weighed on demand for the oil-sensitive currency.
Later today, Canada’s Ivey PMI could influence CAD exchange rates. A solid result for April might help the ‘loonie’ recover some ground.
Australian dollar (AUD) rises on political stability
The Australian dollar (AUD) found support at the start of the week after the Labor government secured a stronger mandate in the latest Federal election, reinforcing political stability.
New Zealand dollar (NZD) gains on upbeat sentiment
The New Zealand dollar (NZD) also began the week on a positive note, as an improved market mood supported demand for risk-sensitive assets.
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