Pound (GBP) muted after ministerial resignation
The pound (GBP) struggled to find support on Thursday in the wake of UK Defence Secretary John Healey’s shock resignation.
Healey stepped down over new defence spending proposals, adding further pressure to Prime Minister Keir Starmer and making his eventual replacement appear increasingly unavoidable.
At the start of today’s session, the UK’s latest GDP data piled more pressure on Sterling, after April’s figures showed the economy contracted by 0.1%.
Euro (EUR) stable following ECB rate hike
The euro (EUR) held steady yesterday after the European Central Bank (ECB) delivered its latest interest rate decision.
Although the ECB raised rates for the first time in a year, the 25bps increase had already been fully priced in by markets. As a result, the bank’s upgraded inflation forecasts prompted only a limited reaction from EUR investors.
With no major Eurozone data due today, movement in the euro may be shaped by broader market sentiment.
US dollar (USD) tumbles as Trump says peace deal reached
The US dollar (USD) initially found support again on Thursday after US President Donald Trump threatened to strike Iran ‘very hard’ and seize Kharg Island, the country’s key oil export hub.
However, USD then plunged after Trump rowed back on these threats, claiming that Washington and Tehran had agreed a peace deal and would sign it in the coming days.
Looking ahead, an expected improvement in the latest University of Michigan US consumer sentiment index could lend the US dollar some support. Meanwhile, developments in the Middle East may continue to inject volatility into USD exchange rates.
Canadian dollar (CAD) weakens as oil prices fall
The Canadian dollar (CAD) drifted lower on Thursday as retreating oil prices weighed on demand for the commodity-linked currency.
Movement in the ‘loonie’ may remain closely linked to oil price dynamics today, with any further losses in crude likely to pressure CAD.
Australian dollar (AUD) slips despite upbeat trade
The Australian dollar (AUD) edged lower overnight, despite a risk-positive market mood, as the ‘Aussie’ pared back some of its gains after rallying yesterday evening.
New Zealand dollar (NZD) gives up gains amid disappointing PMI
The New Zealand dollar (NZD) also weakened overnight, having surged yesterday evening, as profit-taking and a weaker-than-forecast manufacturing PMI eroded NZD’s earlier gains.
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