Pound (GBP) jumps as inflation surprises to the upside
The pound (GBP) initially rallied on Wednesday morning after the UK’s latest CPI release revealed a stronger-than-expected jump in inflation for April.
However, Sterling quickly shed these gains as analysts pointed out the rise was likely fuelled by temporary factors and may not shift the Bank of England’s (BoE) current stance.
Looking ahead, the pound could come under pressure today as the UK’s latest PMI figures are set to show a further decline in private sector activity.
Euro (EUR) extends gains on USD weakness
The euro (EUR) advanced again during Wednesday’s session, drawing support from ongoing weakness in the US dollar (USD).
That said, speculation over upcoming rate cuts from the European Central Bank (ECB) curbed the euro’s gains.
The Eurozone’s latest PMI data is due today. A rebound in economic activity could strengthen EUR demand as the week progresses.
US dollar (USD) weighed down by trade concerns
The US dollar (USD) remained on the back foot on Wednesday amid renewed concerns over the lack of progress in key US trade negotiations.
With investors growing increasingly frustrated by the uncertainty, appetite for the ‘greenback’ was limited.
Today’s release of the S&P PMI surveys could also add pressure if they indicate US private sector growth is stagnating.
Canadian dollar (CAD) softens despite oil tailwinds
The Canadian dollar (CAD) drifted lower yesterday, unable to take full advantage of rising oil prices.
Looking to today’s session, the ‘loonie’ could come under additional strain if Canada’s latest producer price data shows a drop in input costs, reinforcing Bank of Canada (BoC) rate cut expectations.
Australian dollar (AUD) supported but gains limited
The Australian dollar (AUD) edged higher in overnight trade, lifted by improved risk sentiment as the US dollar continued to weaken. However, the latest Australian PMIs showed a further loss of momentum in the private sector, limiting the currency’s upside potential.
New Zealand dollar (NZD) dips after muted budget reaction
The New Zealand dollar (NZD) lost ground overnight, as investors responded cautiously to the government’s 2025 budget, which included a downbeat growth outlook linked to global trade disruptions.
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