Pound (GBP) pressured by UK political uncertainty
The pound (GBP) slumped on Thursday amid a rise in UK political jitters as voters in the Gorton and Denton constituency headed to the polls.
The by-election has drawn notable attention from GBP investors, as it's come to be seen as a key leadership test for a beleaguered Keir Starmer.
With Labour having come in third in the by-election, expect speculation about the future of Starmer’s premiership to weigh on Sterling through Friday’s session.
Euro (EUR) steady following Lagarde remarks
The euro (EUR) was stable through yesterday’s session following comments from European Central Bank (ECB) President Christine Lagarde.
Appearing before the European Parliament Committee on Economic and Monetary Affairs (ECON), Lagarde said the ECB expects Eurozone inflation to stabilise at 2% in the medium-term, hinting this would be supportive of the bank’s decision to keep interest rates on hold.
Coming up, Germany is set to publish its latest CPI print today, with a modest cooling of inflation potentially limiting the euro’s upside potential through the remainder of the week.
US dollar (USD) buoyed by cautious trade
The US dollar (USD) firmed on Thursday as geopolitical uncertainty underpinned demand for safe-haven assets.
The upside in the US dollar was also supported by data showing that US jobless claims rose less than forecast last week.
The release of the latest US producer price index may prompt a response from USD investors today, with a slowdown in factory-gate prices potentially weakening consumer inflation expectations and denting the US dollar.
Canadian dollar (CAD) flat as oil prices fall
The Canadian dollar (CAD) was rangebound yesterday, as easing tensions between the US and Iran led to a softening of oil prices.
Canada’s fourth-quarter GDP print could drag on the ‘loonie’ later today, if it reports a slowing of economic growth at the end of 2025.
Australian dollar (AUD) bolstered by hawkish RBA bets
The Australian dollar (AUD) rallied through Friday’s Asian trading session, underpinned by an increasing number of AUD investors pricing another interest rate hike from the Reserve Bank of Australia (RBA) in May.
New Zealand dollar (NZD) firms in risk-on trade
The New Zealand dollar (NZD) also strengthened in overnight trade amid an improvement in investor risk appetite.
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