Pound (GBP) supported by BoE Pill comments
The pound (GBP) ended last week on a firmer footing, following comments from Huw Pill, Chief Economist at the Bank of England (BoE).
Pill indicated the central bank may need to respond ‘more swiftly’ to emerging inflation risks, reinforcing expectations the BoE could raise interest rates over the summer.
UK markets reopen today after the bank holiday, but with little in the way of fresh data, trading conditions for Sterling may remain subdued.
Euro (EUR) lifted by softer USD
The euro (EUR) edged higher on Friday, benefiting from its inverse correlation with the US dollar (USD).
However, with many European markets closed for May Day, thin liquidity ultimately limited the single currency’s upside.
Christine Lagarde, President of the European Central Bank (ECB), is due to speak later today. If she signals a need for tighter policy in response to rising inflation risks, the euro could gain further ground.
US dollar (USD) volatile amid renewed Middle East tensions
The US dollar saw choppy trading at the end of last week, initially weakening after Iran put forward a revised peace proposal to the US, before recovering most of its losses as sentiment deteriorated later in the session.
This rebound carried into the start of the new week as geopolitical tensions in the Middle East intensified once again.
Today brings the latest JOLTs job openings data, with the US dollar likely to strengthen if it points to increased labour demand at the close of the first quarter.
Canadian dollar (CAD) supported by stronger manufacturing data
The Canadian dollar (CAD) advanced on Friday after Canada reported an unexpected expansion in manufacturing activity during April, with gains extending into Monday as oil prices climbed.
If crude prices continue to rise, the ‘loonie’ may hold onto its upward momentum today.
Australian dollar (AUD) slips despite RBA hike
The Australian dollar (AUD) weakened during today’s Asian session, as the Reserve Bank of Australia’s (RBA) third consecutive rate increase had already been largely priced in by markets.
New Zealand dollar (NZD) steady in cautious trade
The New Zealand dollar (NZD) traded sideways overnight, as lingering uncertainty in the Middle East kept risk appetite under pressure.
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