Pound (GBP) subdued amid UK local elections
The pound (GBP) struggled to attract any meaningful support yesterday, with investors erring on the side of caution as the UK went to the polls in closely watched local elections.
GBP investors were particularly concerned about the potential impact the election could have on UK bond markets, as a wipeout for Labour could prompt a leadership challenge against Prime Minister Keir Starmer.
Looking ahead, the pound may face some volatility today as the local election results start to trickle in and Labour’s losses become clearer.
Euro (EUR) flat following upbeat German factory data
The euro (EUR) was mostly rangebound yesterday as German industrial data and European Central Bank (ECB) policy expectations pulled the single currency in opposite directions.
While German factory orders soared in March amid stockpiling caused by the crisis in the Middle East, hopes for a peaceful solution simultaneously led EUR investors to trim some of their more hawkish bets for ECB rate hikes this year.
A surprise contraction in German industrial production in March has so far had little impact on the euro this morning as EUR investors await a speech from ECB President Christine Lagarde.
US dollar (USD) extends losses on US-Iran peace optimism
The recent US dollar (USD) selling bias remained in place yesterday as investors continued to shun safe-haven assets amid hopes for peace in the Middle East.
Optimism continued to build on Thursday as US President Donald Trump suggested a deal is ‘very possible’ as Tehran considered a US proposal to end the conflict, although later clashes between the US and Iran did reverse a good portion of these losses later in the session.
The latest US non-farm payroll report could extend the USD selloff today, if an expected slowdown in the US labour market last month tempers some investors’ more hawkish Federal Reserve policy expectations.
Canadian dollar (CAD) dented by softer oil prices
The commodity-linked Canadian dollar (CAD) ticked lower on Thursday as global oil prices fell back below $100 a barrel.
Canada’s latest employment figures could provide some lift for the ‘loonie’ later today, if the labour market remained resilient through April.
Australian dollar (AUD) wobbles amid ceasefire concerns
The Australian dollar (AUD) fluctuated overnight on Thursday as the US-Iran ceasefire was tested by clashes in the Strait of Hormuz.
New Zealand dollar (NZD) fluctuates in mixed trade
The New Zealand dollar (NZD) also faced a setback in overnight trade amid the uncertainty in the Middle East.
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