Pound (GBP) supported by stronger manufacturing data
The pound (GBP) traded with a slight upside bias yesterday following the publication of the UK’s latest manufacturing PMI.
The final reading for May revealed factory activity expanded at its fastest pace in four years, although analysts cautioned that the improvement may prove short-lived as businesses accelerated orders ahead of possible price increases linked to tensions in the Middle East.
GBP investors will turn their attention to comments from Bank of England (BoE) policymaker Megan Greene today. As one of the central bank’s more hawkish voices, any firm stance on monetary policy could lend support to Sterling.
Euro (EUR) weakens after poor German retail figures
The euro (EUR) came under pressure at the start of the week after Germany’s latest retail sales report indicated consumer spending has now declined for four straight months.
Additional pressure came from a European Central Bank (ECB) survey which found consumer inflation expectations were unchanged in April.
Looking ahead, the single currency may have scope to recover today as forecasts point to a pickup in Eurozone inflation last month, potentially strengthening expectations for an ECB interest rate increase next week.
US dollar (USD) boosted by robust manufacturing survey
The US dollar (USD) gained momentum through Monday’s session after the latest ISM manufacturing PMI exceeded expectations, with factory activity expanding at its fastest rate since May 2022.
These gains added to earlier support for the ‘greenback’, as renewed military action in the Middle East over the weekend increased demand for safe-haven currencies.
Coming up, the US dollar could extend its advance today if the latest US job openings data shows labour demand remained stronger than expected in April.
Canadian dollar (CAD) weighed down by weak growth figures
The Canadian dollar (CAD) edged lower on Monday as investors continued to digest data released last week showing the Canadian economy entered a technical recession during the first quarter.
The ‘loonie’ could regain some ground later today if oil prices continue to strengthen throughout the session.
Australian dollar (AUD) recovers as sentiment improves
The Australian dollar (AUD) advanced in overnight trade on Monday, clawing back some of its recent losses as risk appetite improved toward the end of the Asian session.
New Zealand dollar (NZD) lifted by improving market mood
The New Zealand dollar (NZD) also moved higher overnight as a more upbeat market backdrop encouraged investors back into risk-sensitive assets.
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