Pound (GBP) directionless after muted UK CPI
The pound (GBP) traded without a clear trend yesterday, as the UK’s latest consumer price index failed to meaningfully alter expectations for Bank of England (BoE) interest rate increases this year.
Headline inflation climbed from 3% to 3.3% in March, in line with forecasts, while core inflation ticked down from 3.2% to 3.1%.
Looking ahead, GBP investors are likely to turn their attention to April’s services PMI. Any signs of slowing activity could place pressure on Sterling.
Euro (EUR) pressured by weaker consumer sentiment
The euro (EUR) weakened yesterday after Eurozone consumer confidence fell more sharply than anticipated.
The index dropped to -20.6 in April, marking its lowest reading since December 2022, as concerns grow over how the Middle East crisis could affect the bloc’s economy.
Today’s focus shifts to the Eurozone PMIs, where an unexpected contraction in private sector activity in April may further weigh on the single currency.
US dollar (USD) volatile amid changing risk appetite
The safe-haven US dollar (USD) saw choppy movement yesterday as developments in the Middle East created an uncertain market backdrop.
While an extension to the US-Iran ceasefire initially improved sentiment, renewed attacks in the Strait of Hormuz later dampened risk appetite.
Looking to today, the latest S&P Global PMIs could influence the ‘greenback’. Although they typically carry less weight than the ISM surveys, any indication of continued weakness in activity may drag on USD.
Canadian dollar (CAD) stable as oil prices edge higher
The Canadian dollar (CAD), which is closely tied to oil, remained broadly steady yesterday as crude prices ticked higher, though the gains were not enough to lift the currency.
March’s expected strong rise in Canadian producer prices could lend support to CAD today, particularly if it reinforces expectations of firmer consumer inflation.
Australian dollar (AUD) slips despite upbeat PMI data
The Australian dollar (AUD) edged lower overnight, with stronger-than-expected PMI figures offering only limited support as a risk-off tone in markets weighed on the currency.
New Zealand dollar (NZD) declines on weaker sentiment
The New Zealand dollar (NZD) retreated during the overnight session as a deterioration in market sentiment reduced demand for the risk-sensitive currency.
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