Pound (GBP) unsettled by bond market volatility
The pound (GBP) struggled for direction toward the end of last week as renewed volatility in the UK bond market weighed on sentiment heading into the long Easter weekend.
Sterling remained subdued at the beginning of this week, with thin market conditions limiting any meaningful movement.
Looking ahead, the pound may stay under pressure today as the UK’s latest services PMI is forecast to show a marked slowdown in growth across the sector last month.
Euro (EUR) quiet amid Easter slowdown
The euro (EUR) traded without clear direction at the end of last week, as limited liquidity and a stronger US dollar dampened demand for the single currency.
These subdued trading conditions carried over into Monday, leaving the euro largely rangebound against its peers.
Barring any significant revisions to the Eurozone’s latest PMI data, the euro may continue to lack direction today amid renewed concerns over rising energy costs in the bloc.
US dollar (USD) supported by Iran tensions
The US dollar (USD) ended last week on firm footing, underpinned by safe-haven demand and a stronger-than-expected US payrolls release.
However, the ‘greenback’ saw uneven trade on Monday amid uncertainty surrounding Iran and a softer-than-expected ISM services PMI.
The US dollar is likely to remain highly reactive to Middle East developments today, particularly as a deadline set by US President Donald Trump for Iran approaches.
Canadian dollar (CAD) volatile amid oil swings
The Canadian dollar (CAD) moved erratically over the Easter period, with the commodity-linked currency tracking fluctuations in oil prices.
Movement in the ‘loonie’ is expected to remain closely aligned with oil market trends today, with further gains in crude likely to support CAD.
Australian dollar (AUD) weighed down by geopolitical concerns
The Australian dollar (AUD) remained on the back foot during Tuesday’s Asian session, as ongoing Middle East tensions dampened appetite for risk-sensitive currencies like the ‘Aussie’.
New Zealand dollar (NZD) weakens in cautious markets
The New Zealand dollar (NZD) also drifted lower in overnight trading as risk-off sentiment reduced demand for higher-risk assets.
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