Pound (GBP) wobbles following jobs data
The pound (GBP) faced mixed movement yesterday following the UK’s latest jobs report, which revealed cooling wage growth and higher unemployment.
However, GBP was kept afloat by comments from Bank of England (BoE) Chief Economist Huw Pill, who suggested that wage growth is still too high and might mean interest rates remain elevated for longer.
Turning to today, BoE Deputy Governor Sarah Breeden is due to deliver a speech. If she echoes recent comments about the need for caution when it comes to rate cuts, Sterling could strengthen.
Euro (EUR) cushioned by upbeat German data
The euro (EUR) was initially subdued yesterday, despite a stronger-than-expected recovery in German economic sentiment in May, due to a risk-on market mood.
EUR exchange rates were able to claw back some losses in the afternoon, thanks to the single currency’s strong negative correlation with a declining US dollar (USD).
Later today, European Central Bank (ECB) policymaker Piero Cipollone is due to speak. Could dovish comments dent the euro?
US dollar (USD) stumbles as inflation cools
The US dollar fell yesterday after the latest US consumer price index showed that inflation unexpectedly cooled from 2.4% to a four-year low of 2.3% in April.
While this softer inflation print put some pressure on USD, many analysts believe prices could still spike due to Donald Trump’s tariffs, and this helped to limit the currency’s losses.
Two Federal Reserve policymakers are due to speak later today. If they reiterate the central bank’s hawkish message of needing to wait for certainty on tariffs before acting on interest rates, USD could regain ground.
Canadian dollar (CAD) declines despite rising oil prices
The crude-linked Canadian dollar (CAD) weakened yesterday, despite rising oil prices, amid concerns over the impact of US tariffs on the Canadian economy.
Notable CAD data remains in short supply today, potentially leaving the ‘loonie’ vulnerable to the negative impact of trade tensions.
Australian dollar (AUD) holds near multi-week highs
The Australian dollar (AUD) traded sideways overnight, holding close to multi-week highs, as a risk-on market mood kept the ‘Aussie’ afloat.
New Zealand dollar (NZD) steady amid risk-positive trade
The New Zealand dollar (NZD) was also steady last night, holding on to recent gains amid the upbeat mood.
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