Pound (GBP) rebounds as political concerns ease
The pound (GBP) strengthened yesterday as investors grew less anxious about the UK’s uncertain political backdrop.
Sterling also drew support after the IMF raised its UK growth forecast for this year, pointing to ‘strong pre-war momentum’.
Looking ahead, the UK’s latest labour market report will be the main focus for GBP investors today. If unemployment rises and wage growth slows, the pound could come under pressure.
Euro (EUR) mixed amid data lull
The euro (EUR) lacked a clear direction yesterday, as an absence of fresh Eurozone data left the common currency trading in line with broader market sentiment.
As a result, EUR softened against its stronger peers while advancing against weaker rivals.
Turning to today, Eurozone economic releases remain limited. This could leave the single currency struggling to find a clear trajectory.
US dollar (USD) stumbles as investors take profit
The US dollar (USD) ended its winning run on Monday, with the currency undermined by profit-taking following last week’s notable gains.
Meanwhile, cautious optimism around ongoing US-Iran peace talks also curbed demand for the safe-haven ‘greenback’.
The latest ADP employment change figures could drive USD movement today, while investors are also likely to keep a close eye on developments in the Middle East.
Canadian dollar (CAD) pressured by softer oil prices
The commodity-linked Canadian dollar (CAD) weakened yesterday as crude prices slipped in response to the latest Middle East developments.
Canada’s latest consumer price index will be the key focus for CAD investors today. A rise in April’s inflation rate could lift the ‘loonie’ if it fuels expectations of a more hawkish Bank of Canada (BoC).
Australian dollar (AUD) falls after RBA minutes
The Australian dollar (AUD) softened overnight following the publication of the Reserve Bank of Australia’s (RBA) latest meeting minutes.
The minutes showed policymakers were more cautious about the need for additional interest rate hikes than markets had expected.
New Zealand dollar (NZD) slides as spending contracts
The New Zealand dollar (NZD) also fell overnight after new data revealed an unexpected 1.3% drop in card spending in April.
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