Pound (GBP) shrugs off softer inflation data
The pound (GBP) ticked higher against its weaker peers yesterday, as GBP investors looked past a weaker-than-expected UK consumer price index.
Headline inflation cooled from 3.3% to 2.8% in April, but the figures had little effect on Bank of England (BoE) interest rate hike expectations. Economists continue to anticipate that UK inflation will climb over the course of 2026.
Looking ahead, the UK’s latest services PMI could influence GBP movement today. A forecast slowdown in activity may place pressure on Sterling.
Euro (EUR) muted amid improving mood
The euro (EUR) lacked a clear direction yesterday, as the latest Eurozone data failed to offer EUR investors a decisive catalyst.
As a result, the safer single currency was largely driven by risk appetite, with EUR losing ground against its more risk-sensitive rivals.
Today, the Eurozone’s latest PMI surveys will be in focus. If they point to a continued contraction in private sector activity across the bloc, the euro could weaken.
US dollar (USD) falters as risk appetite recovers
The US dollar (USD) initially strengthened yesterday, supported by demand for safe-haven assets.
However, USD then slipped during the afternoon as market sentiment improved. A modest pullback in Federal Reserve interest rate hike bets also weighed on the American currency.
Although they tend to have less impact than the ISM releases, today’s S&P Global PMI figures could still influence USD. Could signs of weak private sector activity drag on the US dollar?
Canadian dollar (CAD) weakens alongside oil prices
The oil-sensitive Canadian dollar (CAD) softened yesterday, as a decline in crude prices dented demand for the ‘loonie’.
Oil price dynamics may continue to steer the Canadian dollar today, potentially leaving CAD vulnerable to further volatility.
Australian dollar (AUD) slumps as unemployment climbs
The Australian dollar (AUD) tumbled overnight, after fresh data revealed an unexpected rise in Australian unemployment last month.
New Zealand dollar (NZD) slips amid souring sentiment
The New Zealand dollar (NZD) weakened overnight, as a risk-off mood across Asian markets weighed on the ‘kiwi’.
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