Pound (GBP) pressured by shrinking UK services activity
The pound (GBP) remained on the back foot through yesterday’s trading session after the UK’s latest PMI figures revealed the crucial services sector fell into contraction territory in May for the first time in 12 months.
The unexpected slowdown fuelled speculation that the Bank of England (BoE) could delay any further monetary tightening in the near-term.
Sterling may remain under pressure today after the UK published a sharp fall in retail sales through April.
Euro (EUR) weakens as Eurozone growth fears intensify
The euro (EUR) edged lower on Thursday after the Eurozone’s latest PMI releases showed the downturn in private sector activity across the bloc worsened further this month.
Further weighing on the single currency were revised forecasts from the European Commission, which cut its 2026 Eurozone growth outlook to 0.9%.
Looking ahead, the euro may face renewed pressure if Germany’s latest IFO business climate survey shows confidence in the Eurozone’s largest economy weakened again this month.
US dollar (USD) supported by cautious market mood
The US dollar (USD) advanced against most of its counterparts yesterday as investors favoured the safe-haven currency amid a more cautious market environment.
Demand for USD was also boosted by the latest US S&P PMI figures, which indicated the private sector continued to grow this month, driven by an unexpected pickup in manufacturing activity.
With no major US economic releases due, the US dollar is likely to remain driven by broader market sentiment, potentially extending its advance if investor confidence stays subdued.
Canadian dollar (CAD) subdued despite stronger oil prices
The Canadian dollar (CAD) failed to gain traction on Thursday, with the currency unable to fully capitalise on rising oil prices.
Canada is also due to release its latest retail sales figures later today, with signs of resilient consumer spending in April potentially helping to support the ‘loonie’.
Australian dollar (AUD) weighed down by dovish RBA expectations
The Australian dollar (AUD) drifted lower overnight on Thursday as investors continued to scale back expectations for further tightening from the Reserve Bank of Australia (RBA) following yesterday’s underwhelming labour market data.
New Zealand dollar (NZD) losses limited by upbeat retail sales
A risk-averse market mood placed pressure on the New Zealand dollar (NZD) overnight, although stronger-than-expected domestic retail sales data helped to curb the currency’s downside.
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