Pound (GBP) subdued amid UK local elections
The pound (GBP) struggled to gain any notable traction yesterday, as investors remained cautious while the UK headed to the polls in closely monitored local elections.
GBP traders were particularly wary of the possible impact the vote could have on UK bond markets, amid fears that heavy Labour losses may spark a leadership challenge against Prime Minister Keir Starmer.
Looking ahead, Sterling could experience some volatility today as local election results continue to emerge and the scale of Labour’s setbacks becomes more apparent.
Euro (EUR) muted despite strong German factory figures
The euro (EUR) traded in a narrow range yesterday as upbeat German industrial data and shifting European Central Bank (ECB) expectations pulled the currency in opposite directions.
German factory orders surged in March amid stockpiling linked to the Middle East crisis, while growing hopes for a diplomatic breakthrough prompted EUR investors to scale back some of their more hawkish ECB rate hike bets.
A surprise decline in German industrial production during March has so far had little impact on the euro this morning as markets await comments from ECB President Christine Lagarde.
US dollar (USD) extends decline on Middle East optimism
The recent downward trend in the US dollar (USD) persisted yesterday, with investors continuing to move away from safe-haven assets amid hopes for peace in the Middle East.
Optimism strengthened on Thursday after US President Donald Trump suggested a deal was ‘very possible’ as Tehran reviewed a US proposal aimed at ending the conflict.
The latest US non-farm payroll figures could add to USD weakness today if signs of a cooling labour market lead investors to pare back some of their more hawkish Federal Reserve expectations.
Canadian dollar (CAD) pressured by weaker oil prices
The commodity-linked Canadian dollar (CAD) edged lower on Thursday as oil prices slipped back beneath $100 per barrel.
Canada’s latest employment data may offer support to the ‘loonie’ later today if the labour market showed resilience through April.
Australian dollar (AUD) unsettled by ceasefire uncertainty
The Australian dollar (AUD) traded unevenly overnight on Thursday as clashes in the Strait of Hormuz tested the stability of the US-Iran ceasefire.
New Zealand dollar (NZD) mixed amid geopolitical uncertainty
The New Zealand dollar (NZD) also came under pressure in overnight trade as uncertainty surrounding the Middle East conflict continued to unsettle markets.
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