Pound (GBP) muted as UK consumer confidence tumbles
The pound (GBP) struggled for direction yesterday amid fresh evidence of a sharp deterioration in UK consumer sentiment.
S&P Global’s consumer confidence gauge dropped to a 33-month low in April, as households grew increasingly uneasy about inflation and the outlook for employment.
Today’s session began with the release of the UK’s latest labour market data. While February’s figures showed an unexpected decline in unemployment, Sterling has so far remained subdued as softer wage growth and falling payrolls suggest the jobs market is still losing momentum.
Euro (EUR) steady despite rise in German PPI
The euro (EUR) found it difficult to gain traction on Monday, despite indications of mounting inflationary pressure in Germany.
Germany’s latest producer price index revealed input costs surged by 2.5% in March, fuelling expectations that consumer inflation in the Eurozone’s largest economy may continue to rise as higher costs are passed on.
Looking ahead, Germany’s upcoming ZEW economic sentiment index could weigh on the euro today if investor confidence weakened further this month.
US dollar (USD) mixed as tensions fluctuate
The US dollar (USD) started the week on a firm footing amid fears the fragile ceasefire between the US and Iran could collapse, after Tehran appeared to rule out further negotiations following the seizure of an Iranian-flagged vessel in the Strait of Hormuz.
However, the ‘greenback’ later surrendered most of these gains after reports suggested Iranian officials are ‘positively reviewing’ participation in another round of talks.
Alongside geopolitical developments, the US dollar may also draw support from the latest US retail sales data, which is expected to show a strong rebound in consumer spending last month.
Canadian dollar (CAD) steady as inflation disappoints
The Canadian dollar (CAD) traded in a narrow range on Monday after Canada’s latest consumer price index showed inflation rose at a slightly slower pace than expected.
Looking forward, oil price movements are likely to remain the primary driver for the ‘loonie’, with further gains possible if crude continues to climb.
Australian dollar (AUD) subdued amid uncertainty
The Australian dollar (AUD) was uneven during Tuesday’s Asian session, with ongoing uncertainty surrounding Middle East peace efforts limiting demand for risk-sensitive currencies.
New Zealand dollar (NZD) jumps on strong inflation data
The New Zealand dollar (NZD) surged in overnight trade after stronger-than-expected first-quarter inflation boosted expectations of a near-term interest rate hike from the Reserve Bank of New Zealand (RBNZ).
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