Pound (GBP) weighed down by UK political uncertainty
The pound (GBP) fell sharply on Thursday as amid UK political jitters as voters in Gorton and Denton cast their ballots in a closely watched by-election.
The by-election attracted significant attention from GBP investors, as it was seen as an important confidence test for embattled Prime Minister Keir Starmer.
With Labour finishing third in the contest, renewed doubts surrounding Starmer’s leadership may continue to place downward pressure on Sterling through today’s trading session.
Euro (EUR) holds firm after Lagarde comments
The euro (EUR) traded largely sideways yesterday following remarks from European Central Bank (ECB) President Christine Lagarde.
Speaking before the European Parliament’s Committee on Economic and Monetary Affairs (ECON), Lagarde stated the ECB anticipates inflation across the Eurozone returning to its 2% target over the medium term, reinforcing expectations that policymakers will maintain current interest rates.
Attention now turns to Germany’s latest inflation figures, where signs of easing price pressures could curb further euro gains heading into the weekend.
US dollar (USD) supported by cautious market mood
The US dollar (USD) strengthened on Thursday as geopolitical uncertainty encouraged flows into traditional safe-haven currencies.
Additional support came from labour market data after US jobless claims increased by less than analysts had anticipated last week.
Later today, the publication of the US producer price index may influence USD sentiment, with softer factory-gate inflation potentially weighing on expectations for future consumer price growth and pressuring the currency.
Canadian dollar (CAD) steady as oil prices retreat
The Canadian dollar (CAD) traded within a limited range yesterday as a decline in oil prices followed easing tensions between the US and Iran.
Canada’s latest fourth-quarter GDP release could weigh on the ‘loonie’ later today, amid projections that economic growth slowed toward the end of 2025.
Australian dollar (AUD) lifted by hawkish RBA expectations
The Australian dollar (AUD) advanced during Friday’s Asian session, supported by growing market expectations that the Reserve Bank of Australia (RBA) could deliver another interest rate increase in May.
New Zealand dollar (NZD) gains amid improving risk sentiment
The New Zealand dollar (NZD) also moved higher in overnight trading, benefiting from a pickup in global risk appetite.
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