Pound (GBP) shaken by persistent uncertainty
The pound (GBP) remained under pressure yesterday as ongoing political uncertainty in the UK continued to weigh on the currency.
Prime Minister Keir Starmer seemed to have avoided an immediate challenge to his leadership. However, speculation that Health Secretary Wes Streeting could step down and spark a contest in the coming days kept GBP subdued.
Although the latest UK GDP data revealed solid economic expansion at the beginning of the year, political unease may overshadow the upbeat figures. Should Streeting resign and mount a leadership bid, Sterling is likely to weaken.
Euro (EUR) weighed down by USD strength
The euro (EUR) softened yesterday as the single currency was pressured by its negative correlation with the strengthening US dollar (USD).
At the same time, underwhelming Eurozone economic releases left EUR with little support.
A speech from European Central Bank (ECB) President Christine Lagarde may influence the euro today. Any indication that an interest rate hike is approaching could boost the common currency.
US dollar (USD) strengthens on Fed speculation
The US dollar climbed further yesterday after the latest producer price index reported a sharp rise in factory gate inflation in April.
This reinforced expectations that the Federal Reserve may raise interest rates before the end of the year.
Looking ahead, the latest US retail sales data is in the spotlight today. Could weaker sales growth temper USD demand?
Canadian dollar (CAD) buoyed by higher oil prices
The oil-linked Canadian dollar (CAD) gained ground against its weaker peers yesterday, with rising crude prices lending the currency support.
With Canadian economic data still absent from today’s calendar, oil prices may remain the main catalyst for CAD movement. Another increase in crude prices could offer the ‘loonie’ further backing.
Australian dollar (AUD) uneven as risk sentiment fluctuates
The Australian dollar (AUD) traded erratically overnight as a mixed market mood left the ‘Aussie’ struggling to find a clear direction.
New Zealand dollar (NZD) mixed amid hesitant trade
The New Zealand dollar (NZD) also lacked a clear trajectory overnight, as uncertain market conditions and an absence of fresh data limited movement.
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