Pound (GBP) wavers following GDP contraction
The pound (GBP) traded without a clear direction on Friday, as news that UK GDP shrank by 0.1% placed some pressure on Sterling.
However, a fall in UK government borrowing costs helped to cushion the pound, preventing GBP from suffering losses.
Sterling could remain mixed today, as GBP investors look ahead to Thursday’s Bank of England (BoE) interest rate decision and the Makerfield by-election.
Euro (EUR) muted amid lack of data
The euro (EUR) also struggled to find a clear trajectory on Friday, with markets seemingly holding their breath for further details on a potential Middle East peace agreement.
Meanwhile, an absence of impactful Eurozone economic releases left the common currency trading in a narrow range amid the uncertainty.
Looking ahead, the Eurozone’s latest industrial production figures may offer EUR some modest support today, with markets forecasting a slight improvement in April.
US dollar (USD) rangebound amid mixed mood
The safe-haven US dollar (USD) fluctuated at the end of last week amid uncertainty over a possible US-Iran peace deal.
Although President Donald Trump said an agreement had been reached and would soon be signed, Iran pushed back, insisting that nothing had been finalised.
Turning to today, USD weakened at the start of the week’s session after the framework for a peace agreement was reached over the weekend. The ‘greenback’ may stay under pressure as the session unfolds if a risk-on mood prevails.
Canadian dollar (CAD) falls as oil prices soften
The crude-sensitive Canadian dollar (CAD) moved in line with oil prices on Friday, with CAD briefly touching multi-month lows as crude slipped to its weakest levels since the first week of the US-Iran war.
The ‘loonie’ has fallen again this week, with CAD hitting a two-month low against EUR and a four-month low against GBP. If oil prices continue to decline, the Canadian dollar could face further selling pressure.
Australian dollar (AUD) rises on US-Iran peace hopes
The Australian dollar (AUD) strengthened at the start of this week’s trade, as the US-Iran peace deal lifted demand for the risk-sensitive ‘Aussie’.
New Zealand dollar (NZD) lifted by upbeat sentiment
The New Zealand dollar (NZD) also opened the week on stronger footing, supported by the improvement in market sentiment.
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