Pound (GBP) mixed as markets digest PMIs
The pound (GBP) was choppy yesterday, as GBP investors digested the UK’s preliminary PMIs for March.
The surveys revealed a sharp slowdown in service sector activity, including weakening demand and accelerating job cuts. However, they also revealed rising price pressures, which reinforced bets on a more hawkish approach from the Bank of England (BoE).
Turning to today, the UK’s consumer price index for February showed that headline inflation held steady. However, a slight unexpected uptick in core inflation is lending the pound some support this morning.
Euro (EUR) uncertain following PMI surveys
The euro (EUR) traded without a clear direction yesterday, with the Eurozone PMIs offering an insight into the early impacts of the Middle East crisis.
While the conflict and subsequent rise in energy prices are stifling Eurozone growth, they are also contributing to inflationary pressures, which may prompt the European Central Bank (ECB) to consider raising interest rates.
Looking ahead, Germany’s latest business climate index could undermine EUR today, if it reveals a collapse in confidence due to the outbreak of war in the Middle East.
US dollar (USD) recoups losses as relief rally fizzles out
The safe-haven US dollar (USD) staged a modest recovery yesterday, after Iran pushed back on US President Donald Trump’s claim that the two sides had held ‘productive conversations’ on ending the war.
These conflicting accounts from Washington and Tehran, paired with ongoing attacks in the Middle East, punctured the relief rally that had taken hold on Monday.
American data is thin on the ground today, likely leaving USD to trade on market risk dynamics. Any further shifts in sentiment relating to the Middle East crisis could bring choppy movement for the safe-haven ‘greenback’.
Canadian dollar (CAD) rangebound in lockstep with oil
The crude-linked Canadian dollar (CAD) wavered sideways yesterday, with the ‘loonie’ trading in tandem with wavering oil prices.
Oil price movements may continue to be the primary driver of the Canadian dollar today, with CAD potentially facing volatility if energy markets remain turbulent.
Australian dollar (AUD) wobbles as inflation cools
The Australian dollar (AUD) wavered overnight amid a shifting market mood and a softer-than-expected Australian CPI reading.
New Zealand dollar (NZD) see-saws as risk appetite shifts
The New Zealand dollar (NZD) rose and fell yesterday, as conflicting accounts of a US proposal for peace in Iran saw risk sentiment waver.
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