Pound (GBP) slips as tariff exemption hopes fade
The pound (GBP) weakened yesterday as it became apparent that the UK would not be exempt from the initial tariffs set to be announced by the US today.
GBP investors had hoped that ongoing UK-US trade talks would result in a last-minute deal to avoid tariffs on trade, so this news dented Sterling.
With no notable UK data due out today, wider market trends could continue to impact the pound. Any hopes that the British government could negotiate a favourable deal with the White House in the near future may aid GBP.
Euro (EUR) dips as inflation cools
The euro (EUR) fell against many of its peers yesterday as cooler-than-forecast Eurozone inflation fuelled European Central Bank (ECB) interest rate cut bets.
The bloc’s latest consumer price index showed headline inflation cooling from 2.3% to 2.2% in March, rather than holding steady, and core inflation easing from 2.6% to 2.4%, versus the forecast 2.5%.
Today, transatlantic trade tensions could infuse EUR with volatility. If the EU vows to retaliate against US tariffs, the single currency could come under pressure.
US dollar (USD) uncertain as Trump tariffs looms
The US dollar (USD) was choppy yesterday, wavering higher against weaker peers but struggling elsewhere, as markets braced for Trump’s incoming tariffs.
A contraction in factory activity in March, as reported in the latest ISM manufacturing PMI, then dented USD in the afternoon.
Looking ahead, USD could face notable volatility today as markets respond to sweeping US tariffs. A risk-off mood could support the ‘greenback’, while worries about a US recession could create headwinds for the American dollar.
Canadian dollar (CAD) mixed as oil prices wobble
The crude-linked Canadian dollar (CAD) traded without a clear trajectory yesterday as wavering oil prices triggered choppy movement in the ‘loonie’.
CAD exchange rates could face pressure today if fresh US tariffs add to growing concerns over Canadian exports to the US – its largest trading partner.
Australian dollar (AUD) firms amid risk-on trade
The Australian dollar (AUD) strengthened overnight as an upbeat market mood lifted the risk-sensitive ‘Aussie’.
New Zealand dollar (NZD) rises as market mood improves
The New Zealand dollar (NZD) also rose amid the risk-on mood overnight, with sentiment surprisingly improving despite Donald Trump’s looming tariffs.
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