Pound (GBP) firms ahead of Starmer-Trump meeting
The pound (GBP) trended broadly higher through yesterday’s session, thanks to a weakening of many of its peers.
The upside in Sterling was supported in part by hopes that the UK will emerge relatively unscathed from a potential transatlantic trade war.
Looking ahead, the focus for GBP investors today will be on UK Prime Minister Kier Starmer’s first face-to-face meeting with US President Donald Trump. A good rapport between the two leaders may reflect positively on the pound.
Euro (EUR) undermined by falling German consumer confidence
The euro (EUR) stumbled on Wednesday amid a worrying fall in German consumer sentiment, with the outlook for March deteriorating to its worst levels in 11 months.
Adding to the pressure on EUR exchange rates was growing concern over a potential US-EU trade war.
The European Central Bank (ECB) will publish the minutes of its January policy meeting later today. Expect to see the euro come under pressure if the minutes highlight policymakers’ dovish bias.
US dollar (USD) firms in cautious trade
The US dollar (USD) strengthened yesterday as the uncertainty surrounding US trade policy saw investors favour the safe-haven currency.
However, these gains remained modest in scope, amid a continued decline in US Treasury yields.
The US will publish its latest durable goods orders data later today. Economists forecast a sharp rebound in order growth last month, which may help extend the US dollar’s gains.
Canadian dollar (CAD) muted as oil prices strike two-month low
The Canadian dollar (CAD) faced resistance on Wednesday, as the continued fall in oil prices reflected negatively on the commodity-linked currency.
In the absence of any notable Canadian data, it’s likely movement in the ‘loonie’ will be tied to oil price dynamics.
Australian dollar (AUD) slides in risk-averse trade
The Australian dollar (AUD) retreated overnight on Wednesday as an increasingly cautious market mood saw investors shy away from the risk-sensitive ‘Aussie’.
New Zealand dollar (NZD) stumbles despite upbeat data
The New Zealand dollar (NZD) also retreated in overnight trade, as the deterioration in market sentiment offset a larger-than-expected improvement in domestic business confidence this month.
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